Anyone Can Buy Real Estate

by Galia Gichon on July 30, 2007

This blog entry illustrates how even if you think you can’t buy real estate, chances are you can. It is a motivating story about an unlikely real estate buyer.

Denise was an attorney that had gone through a career change. She had worked as a successful attorney but did not like her job. She decided to leave her lucrative attorney job and work in legal consulting. The first year or two would be a drastic reduction in income but she had the potential to eventually earn over $250,000 a year. Due to her low income, for a year and a half, she got her budget down to bare bones. Finally, this year, she was starting to earn her potential and had already earned $150,000 as of June. It would turn out to be a great year. In addition, she decided to follow her passion and study for a Master’s in Fine Arts in the evening – her true love.

At this time, she came to see me. She had no credit card debt, a pared down monthly budget, lots and lots of student loans (over $100,000) and a great income (over $10,000 a month net). We went over her short-term emergency savings and ways to tackle her student loans. I then told her, she should buy an apartment. “What!!!!????” was her response. She couldn’t believe it. She didn’t think she would ever own an apartment or real estate. Being that her only debt was student loans, she had a good amount of money saved, great earning potential and low monthly expenses. I thought it was the perfect time. The student loans were not going to go away and I was suggesting she buy a small one-bedroom in Brooklyn. She had already looked at the real estate section and saw some one-bedrooms for about $250,000 in an area she felt comfortable living in. With the money she had saved for a down-payment, her mortgage would only be about $200-300 more than her rent. With the tax deduction, she would receive, it was well worth it! Then, once she had bought the apartment, she could make a dent in paying off her student loans.

Denise walked away from our meeting on cloud nine. She felt invigorated and motivated that she was taking charge of her finances and finally owning real estate. What about you? Do you have a similar situation? Tell me at galia@downtoearthfinance.com.

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