Hi, I am looking for my first time purchase in the North Bay. I live in SF, and thought to buy something with at least 2 bedrooms.
I have about $18k saved, and make about $60k/year. I work for myself and I am handy, meaning, I can put up drywall, some carpentry, and flooring. Still figuring out what I will qualify for. I think it may be around $300k or so.
I thought of auction.com, or any place I can get a good deal on a place.
I’ve checked with a RE agent, a lender, and have checked zillow, and auction.com.
If I do go with the auction site, are there a lot of things I need to know? Are those good ideas to start for a first time purchase or are there other things I should consider?
I am going to be straight with you, based on what you stated (thanks for the details upfront) it will be tough for you out there. Why? Ok, you want North Bay correct? Well, with the recent wild fires, there are a lot of buyers out there from the North Bay looking everywhere and they have more money than you at the moment and they are desperate to buy. We are hearing that the Chico marketplace even has been impacted due to these burned out folks.
My good friend in RWC is self-employed and frankly my crack mortgage broker Tracie couldn’t even help her on a refinance despite her owning a very nice large piece of property in RWC. Gosh, I would love to have an opportunity to develop it. Huge lot. All she wanted to do was refi to a lower rate but because of her employment history/type there was nothing that Tracie could do for her.
This is one time I will suggest that you partner up with a buddy or business partner where you both go in on a small property. Perhaps you are the contractor more and say your partner is more the capital side. Together, you will hunt down a fixer (ideally a cosmetic one) that hopefully you can flip and make some money. Gotta get more money in your hands. Once you have more money, then you can do more, either on your own or with your partner. Good luck!!!
Mortgage is available at higher rate. Auction may not work with a low down payment.
Does FHA loan accept self employment income?
I think there is more opportunity in east bay or Sacramento at this price point. North bay appreciation might be slow due to small population.
You can buy a tenant occupied duplex so the rental income can help you qualify. Afterwards you can negotiate with the tenant to see whether the tenant will be willing to move and allow you to live in your property.
However, you need to be very nice to your tenant to avoid being killed
These auction sites do not have a closing time so long as there is another bidder on it. It can go on all night. Even if the highest bidder met the reserve bids the seller may not play your game. Some are posted on MLS already. The listing agent can show you but he has no say so. A few are never meant to show until acceptance. There are some other fees that they keep if you walk away so they offer to the 2nd highest bidder. Are they bargains? I think not.
Definition. A second trust deed can be a second mortgage or a home equity loan backed by a bank or other lender. A second trust deed means that there is already another trust deed in place that uses the property as security. In most cases, this first trust deed will be the original mortgage for the property.
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What Is a Second Trust Deed? | LegalZoom Legal Info
Regarding auctions, I thought the big problem was not being able to see the property in person. That’s when we bailed. Also, they weren’t necessarily priced much better than the property would’ve gone for regular. (I think at the time elt1 was saying about 10% lower)
All that said, if you do decide to go the auction route, I’d recommend going and seeing every open house/house you can that is a candidate for auction (I’m assuming that means short-sale, but figure out how they’re getting there). There were a handful that I recognized from listings before they went to auction, so you might be able to see them first.
I’m going to second/third the suggestion to find a housemate to go in on a duplex with. If you’re not married, then you could both get housemates and in the long run, hopefully your rent income from others will pay your own rent too. I found that duplexes had a much better price per square foot that SFH’s.
I guess I don’t know the pricing in North Bay, but the numbers you threw out seemed low for the Bay Area. I wish you luck!!!
Good point. I know firsthand of mold or some other stuff that came out from behind a wall in Berkeley a decade ago when I removed some pre-drywall plaster.
Also, I live alone in SF in a very modest place and I pay $1200/mo. in rent.
My credit, according to credit karma and experian is between 778 and 789
No offense, I am not trying to disappoint you here, but you are ill prepared for the war on ownership.
You are too poor to buy a home nowadays.
Questions and suggestions:
1- $18K in the bank? You need to have 20% for down payment as minimum to beat other wealthy people around looking for the same as you (unless our loan officer here tells me the opposite by going FHA, etc.)
2- Savings of 6 months of liquid assets after buying a home. It means 6 months of mortgage saved somewhere, plus whatever you spend on food, services, property taxes, and whatnot. Because you eat, spend on gas, etc, right?
3- The distance to-from work: I used to paint as a living, and I find out I hated, disregarding I lived closed by, going from E Palo Alto to any other town farther than RWC or don’t even remind me of Los Gatos! It meant more for gas, food, nerves and wasted time on driving long distances. So, add the expenses that you will incur on that.
4- Did I mention property taxes? About $300-$500 a month depending on the price of that home.
I am not savvy as the guys here, they may tell you more about the “untold” taxes or expenses that come attached to owning a home, not as an investor, that’s another thing, but as a homeowner not deducting how your dog swags its tail.
It meant more for gas, food, nerves and wasted time on driving long distances. So, add the expenses that you will incur on that.