advice for a newbie please

Why not more specifically describe your situation, financial picture, and future plans. The question as asked is impossible to answer.

have around 20K saved. i can bank around $1000 a month. im trying to not venture into the $400k mark for a condo, but everything i see that is nice is around that price range. this will be my starter home. 1st purchase. not sure of future plans.

Save and wait.

Why do you want to buy a condo?

i dont see a need for a house in my stage of life right now. later on probably. but for now id like to live it up in a nice luxe condo. are you suggesting otherwise west81st?

imrbilly, I think West81st is asking why you aren't looking at co-ops also. For a 1BR condo under $400k, you're certainly looking at "non-prime" neighborhoods, and most likely in Queens or outer Brooklyn. That may change in the next year or so though.

i have heard nothing good about co-ops. with its rules & owning a share of the bldg. thats whats been keeping me away. that's why im leaning for a condo with it being more yours to own

Could also be that the OP is not talking about condos in NYC but somewhere else.

But I don't know why you'd post on streeteasy asking about real estate outside NYC.

You do not have adequate reserves or finances to be purchasing right now. Certainly not for $400K. This is not the market to jump into as prices are sliding and may not recover for a while. With a max of $44K in the bank two-years from now and a salary of $70K a year, "nice luxe" condo is a fantasy let alone talking about a two bedroom.

I'll take at face value that your posts are serious inquiries. With that, the few words you've shared belie a very fundamental lack of realism about your current financial position or understanding of NY RE.

I think what you need to do is sit down with a serious independent financial advisor and map out your goals and how to best achieve them. Couple this with reading up on RE by perusing these forums, reading www.urbandigs.com, follow www.curbed.com...in short you really need to bone up on NY RE before committing to the most expensive purchase of your life.

Basically, I was getting at the same point as kylewest, a bit more gently.

imrbilly, sorry didn't see the details on your financial sitch. I agree with kylewest though, you're unfortunately far away from realistically being able to purchase a $400k condo, unless someone else is putting up a substantial down payment. I don't think you should be so quick to dismiss co-ops though, as they certainly have their advantages (one of which is that they're generally cheaper) and they do make up the majority of the housing stock in this city.

kylewest, thanks for the links. i def. will be reading more. im not exactly moving right now, but i am looking. the game plan would be to save as much money as i can and see what i can purchase in the future. i just want to be ahead of the RE game and say that im a homeowner. do you think it's wise to be considering a condo for a 1st home purchase or should i just save for a house? how much money do you think i should have saved before i start making a move?

Sorry if I am blunt. I tend to be. Nothing personal.

Unclear about what you mean about saving for a house since there are none in Manhattan that mortals can afford and not sure where you mean to look. I agree with others that it is sort of odd to just rule out coops which offer benefits you have overlooked or discounted.

In terms of personal finance, I am a believer in making choices assuming worst case scenarios. If all goes well, that's terrific. But what happens if you find yourself unemployed for 12 months? What if investments don't yield historical averages? How thin are you stretching yourself? How much of a cushion are you leaving yourself?

If you find a place to accept only 10% down, you'd have a 360k mortgage, which using a cheap mortgage calculator is $2000 of payments on a 30-yr fixed at 5.13%. 2.0x maint per month per square foot on your 500 s.f. place = $1000. You could afford that $3000 outlay on your salary.

The issue is where do find even a 10% deposit let alone a place that will take it?

You should look seriously at studios in coops. You are in the situation of someone who would be willing to deal with the negatives of coops in exchange for the lower price.

Well, you could afford the $3000 outlay if you didn't eat much. Hope you don't like TV either.

imrbilly, if you can afford a $20k downpayment then in current climate of 80% financing I trust largest property you could bid on would be something with a $100k price tag. If you find a bank with 90% financing, then largest property with $20k would have a $200k price. If you could find such a deal than your monthly payments would be higher than what you would get with 80% financing. Run these through a morgage calculator to see what the payments would be.

Currently only co-op studios outside of Manhatten go for that amount; even those mostly suck.

But there are good news -- your $75k salary is large to afford a downpayment on a $200k property. (General statement, subject to credit and lifestyle.)

Important items to consider -- a) Since you have around $20k in bank a $20k down decision is dangerous. Say tomorrow you have an urgent expense of $10k that is somehow not addressed by your insurance -- you'd have your tail jammed where you have to flip the newly bought place.

b) The prices are falling down. Give it two years, buff up on savings and wait for the market to cool off the current values. Back in 1998 1BRs were going for $200k-$250k in decent parts of Mnh.

That would be your best bet.

Good luck!

Imrbilly, you might like my book, which is a memoir of my first year in real estate but has some financial tips in it too.

You can get it here: http://tinyurl.com/2ag28z

I'll give you one rule of thumb from it here, which is that you can take a mortgage of 2-3x your salary. If you have $20K saved and make $75 K a year, the top of your price range is currently $245K.

ali r.
{downtown broker}

Imrbilly, you should start but talking to a mortgage broker who deals with manhattan & he/she will let you know realistically what you can afford. (I can recommend a few if you'd like). Right now, it is virtually impossible to get a mortgage with anything less than 25% down. (It is irrelevant if the condo allow 10% down, no bank will give you a 90% loan). On a $400K apt, you would need a down payment of $100K, not to mention the 3-5% you'll need for closing costs. I hate to burst your bubble, but unless someone is helping you out with the down payment you may not be able to buy. Why not rent a nice 1 bedroom instead?
sophia.anzaroot@elliman.com

why on earth would you want to be buying anything?! Are you planning to be single forever? If not, that severely limits your time horizon. Buying with a short time horizon is bad in general, and worse in a falling/uncertain market.

I think you said that you want to buy in order to "say that you own". That's great, and some people are willing to pay for psychological benefits like that, but with $75K compensation and $20K in that bank, you can't afford that luxury.

When my pay was in that range, not only did I rent, but I lived with roommates. And in the slums.

If you want to buy, look around and see that house prices are falling. Why hurry to buy into a falling market? Time is on your side. Save your cash and buy for much less in the future. The way to win the game is to have cash on hand when others cannot get a loan. You do not want to be bidding your hard-earned savings against people who are bankrupting themselves with debt. It will be time to buy when lenders once again demand a 20% downpayment from everyone and get serious about checking ability to repay. We're not there yet, not even close. Find a nice cheap rental, invest your savings every month, and enjoy the show till then.

Save, save, save. And buy a little bit bigger then you need so you can stay if you need to.