A few weeks back, I was lucky enough to sit down for a great interview. I had been meaning to talk with this individual for a long time. Topics ranging from business to real estate, and from politics to planning for the future. As a potential first time home buyer myself this couldn’t have come at a better time.
My uncle, Ron Dupont, founded and runs one of the largest and well-known real estate businesses in New England. Red Oak Apartment Homes was founded back in 1984 and has it ever come a long way from there!
In my sit down with Ron, I learned much more than what makes a good home or apartment buyer. We talked about the value of hard work coming from humble beginnings. We talked about why the real estate business was an attractive business opportunity; How to get through a downturn. Overall, we chatted for 90 minutes and I feel it could’ve gone on even longer!
What I present to Home At 30 readers today is the tip of the real estate iceberg. I plan on an entirely separate post digging into the background of Red Oak and how a real estate company is founded.
Today’s focus will be on some tips and best practice advice Ron relayed to me during our sit down. Any potential first time home buyer can use this post as a reference tool now and in the future.
Tips for Evaluating & Buying Property
Some of the topics and resources Ron and I discussed were a revelation for me. Turns out, the world-wide web has a wealth of tools and tricks to streamline the real estate process as much as possible. Make sure you have every available asset in your tool belt. It will make building the dream a lot easier.
The Number One Question
A first home comes with its advantages (the government wants young people buying mortgages). Buying for the first time comes down to you and your own personal situation, Ron tells me. There is a question everyone should have nailed down, however, regardless of your situation.
A super important question for a first time home buyer: “What is my 3-5 year plan?” Do not make a commitment without a solid understanding of where you expect to be in five years time. The place you settle into will be entirely different depending on these factors.
How often will you be there? Nights and weekends only? Just to sleep and eat? Or will you be working from home and spending a ton of time there? Are you looking for a fixer-upper? Good at doing handiwork or rely on contractors?
Get a feel for your personal situation and goals before finding an acceptable type of property to look at. Don’t try to fit a square peg into a round hole. All of the above questions should have a well thought out answer before you proceed.
Just like you’d build a house, build a solid foundation for your home search on a platform of your own personal/career game plan before casting off.
Loans and Down Payment
First-time home buyers get a big boost on loans, with the ability to get approved for a mortgage with as little as 3.5% down.
Ron suggested looking at programs the housing authority runs for your given state. I had never thought going to my state’s Chamber of Commerce website would ever be on my radar, but here we are. Use these sites as a base to begin your research.
The NH Housing Authority, for example, has a great website which provides a range of programs and options for finding the best loans for you. Loan programs are plentiful as well.
Check out the Chamber of Commerce and Housing Authority websites for your given state when kicking off the search. You can even register to attend live in-person seminars tailored towards a range of home buying situations.
Choosing a down payment and loan option all comes down to what’s best for your particular situation. There’s no silver bullet here folks. Figure out what your game plan is for the next 3-5 years and let that dictate how flexible you can be.
There are a few additional options on the table when looking at mortgages. Pivoting states now, here is the My Mass Mortgage page. MMM provides resources for determining proper budget and affordability rates. They have calculators as well, so you can really crunch numbers and be scientific about what works the best for your income and long-term plan. You can also check out lenders who participate in the state’s programs.
Getting the Best Value
Getting the most value out of a property comes down to a simple concept – treat the home buying process as a side project or hobby. Ron suggests getting on a regular schedule of going out and viewing tons of properties. Eventually, you begin to get the hang of it and can match properties to their price.
Getting a feel for seeing new places and knowing the right questions to ask goes a long way. Doing this enough can turn you into a savvy real estate mind who knows when a property is over or undervalued. Finding a place that fits your needs best is easier after getting the hang of judging new places. Get the hang of this and voila, you can see where the value is!
A great example of finding resources to get the best value would be joining your state’s home buyer’s program. Mass.gov has a website dedicated to first time home buyers. This includes courses you can take for best practices and advice for looking around where you live. No two states will be the same so make sure you check out what’s best for your general area.
Fixed vs ARM mortgage?
The best type of mortgage is a hotly contested topic, to make an understatement. The ARM (adjustable rate mortgage) was a major catalyst for the 2007-08 financial crisis. Low-interest rates that allowed questionable home buyers to go above their means expired, creating an unaffordable mortgage literally overnight for thousands of homeowners. A fixed-rate mortgage, on the other hand, comes with a predictable and predetermined rate for the life of the loan.
If you are sensing a theme in this article, here it is again: choosing a fixed versus an ARM comes down to your personal situation and 3-5 year plan for yourself. There is no “one is better than the other” argument to be made until this is determined. For example – A 5-year ARM with a low initial rate can be very attractive to a home buyer who knows they will only be living there for four years. On the flip side, a fixed rate is more beneficial for a home buyer who is settling down for the long haul.
It was such an awesome experience learning some first time home buying tips from Ron. Hearing not only how to approach buying a home, but entrepreneurial advice and work ethic as well, struck a real chord with me. There will 100% be future articles to come looking into these topics further, as well as a “special project” I’m beginning work on this weekend.
At the end of the day, it’s not always the smartest guy/girl who makes it in the business world. Those who whittle their daily decisions down into simpler concepts and great work ethic come out on top. Buying a home is no different! Set a solid foundation for your search, use the available resources in your state, make it a hobby, and execute when the right fit appears!
I really look forward to writing more articles in the future based on what I learned speaking with Ron. It would be great to hear from readers in other states (or countries) what options they have for buying homes as well. Until next time, thanks for reading.
All opinions expressed on this blog are solely those of Home at 30 and are in no way affiliated with any other organization or institution. The purpose of this blog is to give general education and information about investing, wealth, careers, and college; It is not intended to be professional advice.
Author: Joe Savoia
Joe is a 2014 graduate of Northeastern University and currently works in a field sales role for technology company Acquia. He has worked internationally as one of Acquia’s earliest Australia-based employees and helped in the early stages to develop that region. Today Joe is based out of Boston and lives in Somerville, MA. Joe’s primary interests vary widely, including everything from robotics/AI to finance, blockchain, and the rapidly evolving world of tech we live in.