[pig4bill]

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This part i'm not really understanding, if I were to lets say buy a house being foreclosed for $110k thats worth $180k and I live there for 2 years and I sell in 2 years for $180k because there was no appreciation then I would be profiting like $70k right?

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Desert Cat called it. You're not going to buy a house that's worth $180 for $110k. Do you think everyone in Austin is stupid, and would let that happen? There are a lot of people in that game that are tied in better than you, and would be in there ahead of you.

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Even if a house didn't appreciate and you can't get a good deal on it... wouldn't it just be, you buy it for $120k, you live there for 2 years, you sell for $120k and pretty much break even vs paying rent for 2 years? Or I guess the fees TC mentioned along with:

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Closing costs to sell are going to be 10-15%. That's 18 grand IF it doesn't go down in value.

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A friend of mine I was just talking to says that one of the worst declines in property value in housing markets has been like 3%, so even if you were to buy a $120k house and take a 3% loss, thats $3600 loss in value, but wouldn't that still be cheaper than the amount of money you'd pay in renting? Also, thats a "worst" case scenario... so don't you just save money as opposed to renting, while giving your self a possible chance that it might even go up within 2 years? Seems like a free roll in that sense?

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Find friends that know something about real estate, or stop listening to them. California has gone through 20% drawdowns multiple times. Many areas are down over 20% in this latest drawdown, with more to come.

But if you MUST buy a house now, look for real-estate owned. That is real estate that a bank or mortgage company is holding after they've foreclosed. For example, Countrywide has an 1800 sq ft house in Austin they are selling for $83,900.