Buyer beware! What one may think is a great deal, can easily turn out to be a major ball and chain if you don’t fully know what you’re getting into.

As we embark towards the home buying season, bidding wars and inflating home prices are an inevitable circumstance when inventory is low. However, “Existing-home sales experienced a minor drop for the third consecutive month in January, according to the National Association of Realtors®.” This means that there are some good deals out there if you’re looking to purchase.

Many first time home buyers are on a budget when investing in real estate. Manufactured homes, also known as mobile homes are a great price point as a starter home. These homes tend to be in the $80,000 to $150,000.00 price range. With the tiny house craze you can actually purchase a brand new, 4 bed x 2 bath manufactured home on eBay for $50,000.00. Your friends can park their Escalade in your driveway, take a cheap shot at you with “my car costs more than your house.”

Challenges your going to have with a manufactured home is re-sell value and cash investment utilization. They just don’t appreciate. They can also be challenging to lend on, due to the many restrictions on HUD approved manufactured homes, which can leave your potential cash out equity frozen. Unless your plan is to buy a manufactured home in a resort area, as a second home, from a lending perspective I would stay clear.

Condos on the other hand are great for a first time single or newly wed buyers on a budget. Depending on location, and definitely not the big city, a condo will start in the range of the $150,000.00’s. Condos offer amenities, such as pools, gym’s, private parks, gated community, and many other perks. This all comes with a price called H.O.A. (Home Owners Association) dues. These dues can be quite expensive depending on where your purchasing and what the governing body of the H.O.A. deems necessary. If you like close knit community and are a social butterfly, condos are your jam.

Before you get all excited about re-enacting a “Friends” TV lifestyle, condos do come with baggage. My biggest beef is that your home is at the mercy of your neighbor. If your neighbor decides to take a 3 am bath after a night of heavy libations and happens to make the bathtub the resting place for the night, you can wake up with a flooded home should you be the unlucky soul on the bottom floor.

Other challenges I find with condos is the access to cash out your equity. Condos have a myriad of restrictions that lenders consider before lending on them. Fact is there is just too much liability. The H.O.A. can get sued because someone tripped over a speed bump and broke a hip. Or, more than 15% of your neighbors are delinquent paying their H.O.A. dues. Maybe more than half the units are rentals. The list literally goes on and on. As a lender, when someone brings up condo I cringe. This is really “BUYER BEWARE.”

SFR (Singe Family Resident). This is the golden child. The apex of real estate. SFR’s build wealth, are easily equity accessible, allow you to customize, design, make your own without restrictions (as long as you don’t buy within an H.O.A.) and lenders love to invest in them.


SFR’s are going to be the most expensive of the three, but you get what you pay for. Median SFR home price in the us, per National Association of Realtors, is $247,500.00. This is going to require a healthy household income to enter at this level. But if you can swing it, even if you have to hold out and save an extra year, it’s totally worth it.

There’s more to buying a home than just price. Do the research, and if a condo is on the horizon, do extensive research. Always talk to your lender first and get pre-approved BEFORE speaking to a real estate agent. That way you’ll know where you stand and what to look for.

 


EDITORIAL DISCLOSURE
All content herein is owned by author exclusively.  Expressed opinions are NOT necessarily the views of VNR, authors, affiliates, advertisers, sponsors, partners, technicians or Veterans Today Network.  Some content may be satirical in nature. 
All images within are full responsibility of author and NOT VNR.
Read Full Policy Notice - Comment Policy

Previous articleLt. “Rose Bowl” Miller Graduates from Gridiron Glory to WWII Legend
Next articleWorlds Largest Pork Processor Is Hiring U.S. Veterans Today!
Author Biography
Mortgage Banker at Mutual of Omaha Mortgage
Entering the mortgage industry in 2001, Paul Hampton has over 18 years of mortgage lending experience with over 3,000 mortgage transactions closed. This Southern California native began his career at Ditech.com, a division of GMAC Mortgage.

From 2001-2005 Hampton was a part of the refi boom of the early 2000’s, closing an average of 50 mortgage loans monthly leading him to a member of the Ditech.com Presidents Club. This tempo of loan originations empowered and fueled his mortgage knowledge early on.

In 2005 Hampton joined Lenox Financial Mortgage in Costa Mesa CA. Shortly thereafter he became sales manager of the internet loan originations division and grew that department to 33 mortgage loan officers with a total monthly funding of over 100 loans. His role in management broadened his knowledge of the mortgage industry from compliance, to secondary markets, to customer service retail and wholesale. His 13-year tenure at Lenox Financial Mortgage was instrumental to his mortgage lending prowess during a kaleidoscopic financial era.

Currently Paul Hampton is a Mortgage Banker at the Mission Hills CA branch of Mutual of Omaha Mortgage specializing in VA and government loans, as well as FHA, FNMA, FHLMC, USDA, and ALT-A. Get Paul's Mortgage App