How first-time buyers can get started at minimal cost.

June 12,2020 | Posted By Flavia Brown in Real Estate

If I were just starting out as a limited-funds homebuyer, I would buy any type of affordable property. Let's say you can afford only a $400k condo, but the only areas where condos are for sale in that price range are in somewhat undesirable areas, and you prefer to live in a more upscale city. Here are two solutions: 1) Accept living in the undesirable neighborhood, or 2) if you don't want to live in an undesirable neighborhood, find a good renter for your new condo and continue renting in your preferred city. Therefore, you will become a homeowner AND a landlord. At the same time, your new condo will appreciate in value and you will have a sizeable tax deduction.

Build from your condo ownership and you could become wealthy in a few years. Many people buy their next income property with equity from their existing property. By the way, solution #2 is one of the best hedges against a recession.

Seven additional ways buyers can cut homebuying costs: 1) Have the seller pay part or all of the buyer's closing costs. 2) Have the seller or buyer's agent (Realtor) pay the buyer's property inspection and/or appraisal fee. 3) Have the buyer's lender (mortgage broker) provide a first-time buyer's loan program. 4) Have the buyer's lender provide a down payment assistance program. 5) Have the buyer's lender provide a closing costs assistance program. 6) Have the buyer's lender provide zero down payment. 7) Purchase the home at a discounted price.

Flavia Brown

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