I bought my condo in San Diego in 1995. I was a single parent with two kids. I worked full time and was in school finishing my associates degree. I paid $90,000 for a 3 bedroom, 2.5 bath condo with a 2 car garage. I bought it at a hud auction and had to put $1,000 down as earnest money. I didn’t have the $1,000 so I borrowed it from my brother Calvin Hicks.
When I closed escrow I received a refund of around $885. HUD paid my closing costs. I was entitled to a mortgage interest credit on my tax returns plus my tax liability changed because I had mortgage interest and property taxes to claim as deductions. I sold my condo 6 years later for $160,000 ($70,000 cash) if I would have kept the property it would be worth around 320,000.
Home ownership is different, it’s not as easy as renting, but you are investing in your family and future. You are using your money for you making you rich, rather than paying off someone else’s mortgage. It’s challenging, but you will grow and be better for it.
So do your research, start asking questions and let’s do this. And this applies wherever you are, aim to buy and not rent. That rent you are paying every month can be reducing your mortgage balance and building equity. And if you can’t buy now, start doing what you need to so you can buy! And if you already own, start looking into rental property.
Marjorie McPike, CPA
CFO at Todd Capital