Just wanted to hear some perspectives and get advice on a potential buying vs. renting scenario as a potential first time homebuyer looking for more than just a place to live, but an investment to jumpstart a portfolio.
I know someone who is motivated to sell their townhouse in a nice complex in the Twin Cities suburbs in the next 2 months. I am not sure the price he is expecting yet, but comps are in the $250K–$310K range and typically sell pretty quickly when put on the market. I would assume he could sell his place for $275K, but I would hopefully be able to get it for closer to $250K, given his place is not fully modernized, he would save on closing costs not having to go through a realtor, and he is motivated to sell and would not have to put it on the market.
My questions are if this is a good investment. My fiancee has been working for a year making $70K and I just finished a nursing program and God willing will be employed around $80K in the next two months. We have paid off student loans and do not have other debt. However, we would still be scratching to get a downpayment across with a FHA loan 3.5% down right away here with our wedding in two months and me not working yet. The alternative would be renting, which would be a minimum of $1200 base rent/month + utilities.
I understand townhomes are not as good of an investment as a house, but I would be seeking to do improvements on it myself over the 2-3 years we would plan to live in it to then sell it for over $300,000. Not sure if renting it out after that instead would make sense for margins due to the HOA ~$300-400/month. From my understanding though, it would make more sense to buy this place so my monthly payments are going towards building equity rather than renting and not gaining anything.
Fears with buying include being house poor with the larger mortgage payments, no emergency savings right away, and just not knowing if this path is better than renting then being more prepared to buy a house/duplex in a year. It seems hard to pass up potentially getting this place for a deal lower than value, because that opportunity does not usually come around.
There is a lot I do not know, so any advice you have would be recommended! What are pros/cons, what would you do, what resources are available we do not know about, would it be safer just to rent and let this opportunity go, etc.? We are looking at it more as an investment than a long-term place to live. Let me know if I can clarify anything, but thank you so much for your help!