Expert: Todd C. Menard - 8/3/2009

Question
Dear Expert

    I never owned property before. I just have been using master card for over 15 years. I know I have good credit because I was never negligent on paying my bills or my monthly rent checks, and I never had any debt problems because I am a money saver. I do not know my credit score, for I never applied to purchase any house or property before. My present employer had to check my credit in order to grant me my clearance to work overseas, which I was qualified to receive. If I buy something, I will be first time property buyer. At this time I am working overseas.  I do not know when I am going back to the states because it is up to the company that I work for, but I can have up to 2 weeks vacation time every year to visit.

    I am financial security seeker, who likes to plan to build a solid financial future. When I return home , I will be going back to my mother's house. Before or after my arrival to the states, I will need to embark on something different to start moving forward and get settled. I will need to do something that can provide me with stable income, but I do not feel comfortable to buy property.  My mother bought a ranch house 17 years ago for $144,000. She spent another $12,000 for remodeling and she was trying to sell this house for the past 8 years, but still there are no buyers even after reducing her original price to $120 thousand.

    I want to end this quest peacefully by relocating and paying monthly rents for an apartment; however, if  there is a project that can generate nice profit, I might consider doing one of the following ideas if it can guarantee a successful and stable monthly income profit:   

    Renting or buying a ranch house and finding some roommates who can help me with expenses, or getting a duplex home and living in first floor while putting other tenants upstairs, so I can receive monthly rent from them, or buying 2 unit house, or buying a property and putting it under section 8, or condo. I also like to invest in real estate and stock market, but I do not have any experience in all of these projects.

Do you recommend that I stay in apartment, or do one of the ideas above?
What is your suggested pricing, location, and condition?
Is there will be a big difference whether I start the project next year versus if I start it 2 or 3 or 5 years from now?
If I purchase my property anytime, do I will still be qualified for $ 8000 tax credit? What are the income restrictions for this plan?
Do you suggest any books to buy from Amazon.com?

Thanks for being a volunteer to help.

Answer
Hello - Many of the points you made in your explanation should be discussed with your tax advisor, a financial planner or possibly even an attorney. Short of investigating these different areas of specialty would render any opinion useless on its own merit. That said, 2-5 years from today the market will certainly be different. How different? There is no crystal ball. Investors time the market to achieve their desired financial goals, and every investors goals are unique. The $8000 tax credit is available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009 (unless extended). The following link will provide you with all the details for the tax credit >>http://www.federalhousingtaxcredit.com/2009/index.html<<. There is a plethora of reading concerning property acquisition including "Buying Your First Home" by Gary Keller.  After having visited the web address provided above, contact a lender and learn about your financial requirements of purchasing a home such as earnest money, down payment, closing costs and prepaids, then inquire about interest rate and monthly payments and qualifying requirements. Talk to more than one lender/loan officer and deal with a mortgage broker versus a bank as they tend to offer the identical loan for less. My answer cannot be more specific without you having previously investigated the legal and tax implications for your personal financial position. Doing so would be unprofessional. If you would like additional information please investigate these recommendations then reply. - Thank you - Todd