What I learned from buying my first house

Should you buy a house right now? Quick answer: probably not. 

Buying a house is an amazing feeling. When I bought my first house, I hardly got any sleep the first night because I was so excited. I felt free from having to pay a landlord and excited for my investment. I had optimistic plans of design a killer backyard with a fire pit, garden, and volley ball court (the fire pit actually happened). 

I was lucky that I bought my home in 2011, when the housing market had pretty much bottomed out. My home has over doubled in value since I bought it, although I did sell it in 2014 for a 40% return on my investment. Do I wish I would have held on a little longer? Probably, but at the time I sold it I was living in San Francisco and managing a home in Washington was not easy. My dad was helping me out, but it was becoming stressful for him. So I decided to take a $40,000 profit, gave my dad $5,000 of it to take my mom on vacation and get out while I was ahead.

I learned a lot from that first house. Here are a few things:

• Connect with a real estate agent you trust before buying a home. Ask them a lot of questions and take a look at as many places you can with them. The more that the agent invests in you, the more likely they are going to want to help you.
• Have your agent send you automatic emails when home prices drop. This will allow you to get a good understanding of the market.
• Don't pay off your mortgage sooner, especially if you are only paying 3-4% interest. You can invest that money somewhere else for a 10% gain.
• Make sure you have a thorough lease agreement if you decided to use it as a rental property, and that you go over the agreement with your tenant. This will save a lot of "debating" between you and your tenant.
• Do a background check, and make sure that you are clear in your craigslist posting that they need to pass a background check.
• Take a look at the market and do not sell unless the home is becoming too much work or if you are confident the market is going to start dropping. 

If I were an aspiring first time home buyer today, I would be ridiculously patient. I would only buy a home if the following were my situation:

• I know I am going to own this home for 30-40 years, and I will be ok to see the price drop after I buy it. In this situation, the individual can either rent a home for $1,500 a month, or do a small down payment and pay $1,000 a month. They can also write off the interest on their taxes.
• I have studied an area for over a year, and know that the home I am buying is in an under-priced area, and the home itself is also under-priced for its area. This requires a lot of experience, but some real estate agents who have not bought a home yet may find themselves in this situation.

Other than those two situations, I would be patient, build my credit and wait for the market to crash. Once there is a crash I would begin looking, and making offers on short sale homes directly to the bank. If you make enough offers, you will get a house for an amazing price.

Let me know your thoughts in the comments below.