Looking for some general advice about buying my first house.
 

Well, I think it is time for me to buy my own place. I'm not really getting along with my roommates and my bankroll exceeds my means (my rent is $300 [img]/images/graemlins/smile.gif[/img]). So I've decided that I will definitely be purchasing some sort of house or condo once I get back from the Aussie Millions.

I actually looked at some places last year but didn't actually pull the trigger (which was good because I had underestimated how much taxes would be and I overestimated how much I could afford). I've learned a lot since then and this is what I've come up with:

1) I think spending anywhere from 150-180k on at least a 2 bedroom townhouse (3 preferred, maybe a house but I doubt that).
2) I plan on putting 10% down (so that I don't freak out if I hit an enormous, catastrophic downswing). I know I should be trying to avoid PMI but I'm not entirely concerned about it.
3) I will not have any roommates, but one room will be a dedicated office space (that I can write off).
4) I think my ideal strategy for paying off the house will be through cash games, while my tournament winnings will go toward my bankroll. For instance, I'd MUCH rather play a highly beatable game ($1/2 or 2/4NL online) and make $5k/month to put toward a double mortgage payment and living expenses than worrying if I have a losing month at tournaments, which, of course, is very possible.

I obviously have at least a few years worth of living expenses put away as well, which will help. There are a LOT of places for sale in Pittsburgh so I think the market is good at the moment (and could be better in 2 months when I actually search). Lots of new construction and all 'aht.

One thing that I forgot to mention is that as far as I know I'm not eligible for any first home buyer deals because my income last year was too high (I think your household income has to be ~60k or so to be eligible). Am I wrong about this?

Any other considerations? I'm just looking for some general advice. I truly appreciate any help or advice you guys can give me.

PZ,

IWEARGOGGLES

Re: Looking for some general advice about buying my first house.
 

Prices in Pittsburgh have been pretty stable so far. They never really went up very much, so they haven't really gone down much either. As a result, sellers aren't really lowering their prices much. You should be able to find something good in your price range though, and not have to worry that a year from now it's going to worth a lot less. Obviously, go for a fixed rate mortgage, and have the house inspected by somebody good.

Look at the comps in the neighborhood, come up with a price you're willing to pay, and don't stray very far from that price. If you don't get that one house, they'll be another one. I'm a real hard ass when it comes to negotiating on houses and I haven't been unhappy so far. I've bought several, and every time I've walked away from a house it's been the right decision and something better has come along.

Re: Looking for some general advice about buying my first house.
 

Thanks for responding mmctrab.

Yeah last year I went looking a lot and I didn't buy simply because I didn't find anything that I felt was perfect for me. I mean I guess I have a laundry list of things that I'm looking for but I'll be more lenient once I'm back from Aussie. I really, really need to live by myself.

Anyways, my realtor is actually a close friend of the family so I think she'll be able to do well with the negotiating aspect. She is pretty intent on making sure I get a good deal for whatever I buy. She has definitely told me prices have dropped (it seems that way to me as well because I think prices are different from last year when I looked) and that it is a good market to negotiate in.

Re: Looking for some general advice about buying my first house.
 

shop for the best mortgage before you shop for the house, find one with out pre payment penalties try to avoid high points and fees and so on so u dont fall in love with a place then have to go beg to get approved and have them give you [censored] rates

its good to know the price you can afford and not the payments bc they can always give you lower payment (then u end up paying 10's of thousands more in interest)

know that at closing itll be more then just the 10% down there will be a lot of closing costs there will be a lot of other exp. pmi, title insurance,points, fees, moving exp, etc.

just research research research make sure its a house thats a good deal and not just one you like, houses are usually the biggest investment in life so treat it as that, i think thats pretty much the basics, somewhat common sense but good to keep in mind

Re: Looking for some general advice about buying my first house.
 

Why not just rent a place for yourself? Since you have the money. Buying and maybe selling in a few years if plans change could be difficult. Are you certain you're going to stay there for a while?

Re: Looking for some general advice about buying my first house.
 

I have a friend who wants to sell a nice townhouse in Pittsburgh. [img]/images/graemlins/smile.gif[/img] You two should hook up.

I assume you play professionally. It sounds like you're playing fairly low stakes. Is this true? I personally wouldn't want a house payment as a 1/2 pro. When you say you have living expenses saved up, are you including the house payment?

Re: Looking for some general advice about buying my first house.
 

I didn't really think about shopping for the mortgage before shopping for a house. That is a really good point.

I picked the 10% figure because I factored in closing costs, etc.

I do play professionally and I play higher stakes tournaments. I've done very well the past couple years. I am not a 1/2NL pro, I just thought it would be a good idea to take a low variance approach to actually paying for my life expenses, rather than worrying about a bad month in tournaments.

Some very good stuff in this thread! Keep the good suggestions rolling!

Re: Looking for some general advice about buying my first house.
 

i have been wanting to start investing in real estate for awhile now, and i just want to know from any poker players that own a house how hard is it to get a mortgage if your occupation is a professional gambler.

Re: Looking for some general advice about buying my first house.
 

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i have been wanting to start investing in real estate for awhile now, and i just want to know from any poker players that own a house how hard is it to get a mortgage if your occupation is a professional gambler.

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So true, lining up some creative financing is a good option you probably have more connections than you know as a poker player for this kind of thing.

Re: Looking for some general advice about buying my first house.
 

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i have been wanting to start investing in real estate for awhile now, and i just want to know from any poker players that own a house how hard is it to get a mortgage if your occupation is a professional gambler.

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It's hard for anyone to get a mortgage now, especially if you don't have all the paper trails. If you're a pro gambler, make enough and have the proper documents to prove it you should be in reasonable shape.

Re: Looking for some general advice about buying my first house.
 

This is not necessarily true its always going to be hard as a pro gambler IMO your best bet is to have an LLC that you have paid yourself out of for 2+ years. That being said there are so many ways to creatively finance this kind of stuff like owner financing, wraps, assumptions, private second loan or taking on a partner.

Re: Looking for some general advice about buying my first house.
 

There are lots of banks now that'll give you a slightly higher interest rate in exchange for no PMI. REcently banks started realizing that for decent credit individuals its better for them to self insure their own mortgages and charging 1/4 point or so more in interest.

Another way to avoid PMI is to have the seller carry a second mortgage for the other 10% of the purchase price. That is better for you anyway since the extra payment is going toward building equity rather than into the pocket on an insurance company.

If I were a pro gambler, what I'd probably do is start by approaching small local lenders - credit unions and local banks. They have a lot more flexibility than the big boys and if you can plead your case effectively, you should be fine. If you've got two years of living expenses saved in cash and 10% to put down, I can't see you having a problem getting a loan. Banks love liquid assets. For a small bank/CU, you want to be sure to transfer your liquid cash into one of their savings accounts. That'll be a little carrot for them to try and work something out.

Re: Looking for some general advice about buying my first house.
 

[ QUOTE ]
There are lots of banks now that'll give you a slightly higher interest rate in exchange for no PMI. REcently banks started realizing that for decent credit individuals its better for them to self insure their own mortgages and charging 1/4 point or so more in interest.

Another way to avoid PMI is to have the seller carry a second mortgage for the other 10% of the purchase price. That is better for you anyway since the extra payment is going toward building equity rather than into the pocket on an insurance company.
...

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we became home-debt-owners and used the "lender paid PMI" that you are referring to because it came out better than regular PMI or a 10% piggy back due to our investment horizon. I cannot recall where the crossover was but it was definitely not within our horizon (7ish years).

edit: went with a 30yr fixed...fwiw

edit2: of course the crossovers on these PMI and 2nd mortgage options are going to change significantly if you plan on making extra payments...which doesn't look to be optimal based on the economic direction.

Also, now seems to be a great time for purchasing/negotiating w/ all the panic. Another plus...a mortgage is a fairly decent hedge against inflation if we head that route. But then again, I've heard of some pretty good arguments either way w/ regards to the inflation/deflation debate.

Re: Looking for some general advice about buying my first house.
 

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how hard is it to get a mortgage if your occupation is a professional gambler.

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Try manual underwriting. A "manually underwritten" mortgage. I've heard these are good for salesmen or whomever has a low, or nonexistent base salary.

Re: Looking for some general advice about buying my first house.
 

Do not do it!
Reread previous sentence.
We are at the end of a huge housing bubble and things are going to get real ugly. There will be blood in the streets. Interest rates will go down because the Fed has no choice. Auto sales are getting crummy.
This is no disrespect to Detroit. If you can deal with the cold
it can be a great place. However, if you continue to pay $300 a month rent for the next year, you should be able to purchase what most people consider a mansion for the price of what you are thinking about paying for a townhouse today.
Housing will come back, American autos will come back, interest rates will rise, Detroit will come back, but not within the next year.
If you are worried about a bank loan... don't... there will be plenty of desperate owners willing to finance.
Also, if you wait and purchase a tired, but still serviceable mansion a year from now it will be a great place
to put excess, unwanted cash.
Kash is King, keep your powder dry.

Re: Looking for some general advice about buying my first house.
 

ps everything I just said goes for real estate for the rest of
the U.S. except for the mansion stuff.

Re: Looking for some general advice about buying my first house.
 

[ QUOTE ]
Do not do it!
Reread previous sentence.
We are at the end of a huge housing bubble and things are going to get real ugly. There will be blood in the streets. Interest rates will go down because the Fed has no choice. Auto sales are getting crummy.
This is no disrespect to Detroit. If you can deal with the cold
it can be a great place. However, if you continue to pay $300 a month rent for the next year, you should be able to purchase what most people consider a mansion for the price of what you are thinking about paying for a townhouse today.
Housing will come back, American autos will come back, interest rates will rise, Detroit will come back, but not within the next year.
If you are worried about a bank loan... don't... there will be plenty of desperate owners willing to finance.
Also, if you wait and purchase a tired, but still serviceable mansion a year from now it will be a great place
to put excess, unwanted cash.
Kash is King, keep your powder dry.

[/ QUOTE ]

I'd recommend that you take this advice with a wheel barrow full of salt.