Tell me if my friends are idiots, or I'm the idiot?

[WillyG4444 10+ year member]

So, two of my friends, a couple, are both out of college (Fall '08 and Spring '08 graduated) and the girl has a bachelor's in psychology, while the guy has a bachelor's in web design. The girl is making 14/hr working at the front desk of a psych center working about 45 hours a week, and the guy is working with his father in construction making 10/hr AT BEST, working 30-40 hours a week depending on the business, paid under the books. They're both 23 years old.

The girl has a trust fund with a bunch of money, (Maybe 50k?) and they both don't have much savings, maybe about $3,000 in between the two max.

They applied for a loan for a house, and they were approved for a house up to $315,000. They just put a bid on a house selling for 290k, for 280k. The house looks kind of crappy, it is 2 bedroom, 1 bath, full basement, but the 2nd floor and the basement are not finished.

They want to move in together and are planning on staying in the house for 3-5 years. Is this a good investment? Especially, being that they will basically be living paycheck to paycheck, while relying on the girl's trust fund for any extra purchases, and to fix up the house?

I don't understand why they wouldn't rent and save money, but maybe my way of thinking is totally wrong in this situation? They think that it's better to buy than rent because they own the house. Well, I doubt the mortgage will be paid off in 5 years, so I don't understand the reasoning!

Oh yeah, and the house is not furnished at all, and they will need all new appliances.

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[jco1385 5,000+ posts]

yes

 

[dman4486 5,000+ posts]

The only reason I would go along with something like this is if you are planning to resell in a few years, and are making payments = that of an apartment for the two.

The thought behind this is that with the same money going out, you are actually investing it in a house that after the 4-5 years you can get a return from instead of just a deposit from an apartment

ITC the apartment would be a waste of money.

 

[blazeplacid 10+ year member]

who cares

 

[thaster 10+ year member]

are they married? if not, they are retarded for buying a house already.

 

[WillyG4444 10+ year member]

who cares

Go back to sleep, there are plenty more worthless threads on this forum.

 

[WillyG4444 10+ year member]

are they married? if not, they are retarded for buying a house already.

Nope, not married. They talk about it and in their minds they know they will, but technically no they aren't.

And thanks for your input Dman.

 

[IamDeMan 5,000+ posts]

If they aren't married, then I think it is just one stupid idea from the get go unless only one of them plans on sole ownership. If they were married then it could be a good move or it could be stupid.

 

[IamDeMan 5,000+ posts]

are they married? if not, they are retarded for buying a house already.

Ding.

 

[teen 10+ year member]

if they had extra cash to fix the house up and possibly resell for more, then it makes sense.

doesnt seem like that is their intentions, so im saying theyd be better off renting an apartment and trying to save up a good amount of money for the next 5 years.

 

[quins90lac 10+ year member]

leave them alone and let them do what they want to do . they probably just want a place that they can fuck each others brains out and not have to worry about others hearing them

 

[dman4486 5,000+ posts]

if they had extra cash to fix the house up and possibly resell for more, then it makes sense.
doesnt seem like that is their intentions, so im saying theyd be better off renting an apartment and trying to save up a good amount of money for the next 5 years.

read my previous post.....the apartment is a complete waste of money....and a house will give you at least some of that money back

 

[hornedfrog1985 5,000+ posts]

leave them alone and let them do what they want to do . they probably just want a place that they can fuck each others brains out and not have to worry about others hearing them

Yup^, and they don't want their *** friend on the internet asking if they are stupid for doing it.

 

[blazeplacid 10+ year member]

Originally Posted by quins90lac

leave them alone and let them do what they want to do . they probably just want a place that they can **** each others brains out and not have to worry about others hearing them

Yup^, and they don't want their *** friend on the internet asking if they are stupid for doing it.

yes, which goes back to my first post

 

[hoss 5,000+ posts]

OP is the idiot, well, and the guy who is going to live with the girl... If she has all the capital, the house will have to (and should) go into her name. She will get all of the tax benefits, all the while the guy will be paying half of her mortgage, in other words, she is getting a lot of free money. Not to mention the housing market is in the tank right now, so they will be buying it for dirt cheap, and in a few years can sell it for some profit (hopefully...).

The girl is the real winner, the guy will be paying the girl for her investment, which she should make a good return on investment on.

renting is always throwing money down the hole. it is cheaper in the short term, but you never get that money back... you can save a few hundred a month by renting, but buying a house is pretty much like paying out a loan to someone else every month that you will eventually get back. not to mention the tax benefits of the mortgage.

i commend the girl, she will come out ahead of the guy, far ahead financially... it will build her credit and she will make money. its a win win.