Home Buying After Fellowship

[Mofeen]

I have a question here for you guys. Here is a little background info. Finishing up a pain fellowship this June. I have a pretty good job all lined up and signed for on the dotted line in the midwest. My wife and I have our second kid on the way due this summer. She has a great job making low six figures.

Anyhow, we are looking to buy a new house. Talk about the volatile real estate market aside, how much is too much to spend? This is not a budget question. I am more concerned about the members of my new group and what they my think of this new guy coming in and making a huge purchase right away. The home we are looking at is just under 600K. This should be well within our means but like I said I don't want to be the new guy and seem like I am flaunting my stuff. What do you guys think? Is this kosher?

Thanks a lot.

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[BobBarker]

I would rent for 6 months to a year to make sure you are happy with the job.

 

[Mofeen]

I would rent for 6 months to a year to make sure you are happy with the job.

Good point. I guess I should have also mentioned that I am in a major metro area with a lot of jobs available and both of our families are near so no thoughts on moving out of the area.

 

[Fah-Q]

In this real estate market a house is an anchor around your neck. You might not leave the city but you might want to move neighborhoods or up/downsize in the near future. This will be very difficult if not impossible. Prices are still falling so I'm not sure why you would want to purchase an asset that will soon become worth less than what you paid for it.

I would rent. Hoard some cash and wait for the bottom of real estate market. Your new partners will praise you as smart for renting. Buy a house now and they might start to question your finance/business IQ.

 

[DavesNotHere]

Or...you buy an RV and park it right outside the front door of your new practice...and just confuse the hell out of those new judgemental partners

 

[DO Anes]

If Obama gains in the polls, or is re-elected, the current real estate market will look like wine and roses compared to the crash that will come. Wait and see what happens. This might not be the bottom (yet). If a repub (any repub) gains in the polls or is elected, the real estate market will start recovering.

 

[desflurane]

There are few, if any, good reasons to do what you are about to do. I strongly advise anyone in your situation to wait at least 6 months. Timing the market is pointless and who cares what your other partners think. The real reason is just you don't know the practice. It may seem perfect and that there is no way you'd ever leave right now, but give it at least 6 months. If you still love it then start looking....slowly. Look at the NY Times Rent vs Own calculator and decide if it makes sense then.

I'd also clear ALL debts first as well. But that's just me. Debt=slavery. Period. I'm guessing you won't find anyone on this board with some experience who would tell you to buy at this point in your career, especially in our field with SOOO much uncertainty coming down the road.

I'm not saying never, just when you are pretty darn certain you'll be there for a looong time. There are lots of expenses you just can't fathom at this point.

 

[Gern Blansten]

Do not buy your dream home!!!
I waited four years and still wish I had waited even longer. In fact, I would recommend buying a house only as big as you absolutely need. Don't get too fancy. Pour all of your money into savings and be able to have enough to walk away on your own time line. Mansions and fast cars are so over rated. Don't become a slave to your rich lifestyle. Your income will go up considerably, so you will be able to afford a modest improvement in your lifestyle and still have lots for savings. Once you get to a rich lifestyle, it is so much harder to return to a modest one. Everyone wants some of your money.
I would suggest living off of only half of your income and bank the rest. I know it will be difficult, but in 15 years, you will look back and say it was worth it.
Nobody knows what the future of medicine holds for us, but it doesn't look very good. Don't get strapped into a lifestyle you won't be able to keep up with.
Take it from someone who wishes they had followed the above advice.

 

[Gern Blansten]

There are few, if any, good reasons to do what you are about to do. I strongly advise anyone in your situation to wait at least 6 months. Timing the market is pointless and who cares what your other partners think. The real reason is just you don't know the practice. It may seem perfect and that there is no way you'd ever leave right now, but give it at least 6 months. If you still love it then start looking....slowly. Look at the NY Times Rent vs Own calculator and decide if it makes sense then.

I'd also clear ALL debts first as well. But that's just me. Debt=slavery. Period. I'm guessing you won't find anyone on this board with some experience who would tell you to buy at this point in your career, especially in our field with SOOO much uncertainty coming down the road.

I'm not saying never, just when you are pretty darn certain you'll be there for a looong time. There are lots of expenses you just can't fathom at this point.

Such great advice!!

 

[sevoflurane]

Yeah... clearing debts is the way to go. Writing off that last check to Sallie Mae was one of the most wonderful moments in my last 10 yrs. of existence.

Always have a "oh ****" fund.

Save. Max out your sep IRA or 401k or whatever.

Make sure you like your job.

Then work on getting a home with some bells and whistles.

I don't know how long interests rates are really going to remain this low (my partner just refinanced his house at 2.5%), but they are not going to go anywhere anytime soon. So you have time.