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Buy A House, Pay Off Your Student Loans?
So you're in law school (or any school) and you have a mountain of debt. What to do? According to a couple of lawyers who recently visited my Public Interest Lawyering class, you should buy a house, live there a couple of years, sell it and double your money, pay off your loans, and then do it again but use the proceeds from the second home for something else.
How is this possible? The answer seems to be NACA.com, which gives you a home loan for no money down, no closing costs, 1% under prime. You can finance the purchase plus rehab. And it really works. You have to live in the home for two years, and I think it only applies to homes on the “urban frontier” because the program is designed to “stabilize” (is that another word for “gentrify”?) depressed neighborhoods. But hey, if that sounds ok to you, you might want to think about it. This is only going to work in urban areas w/hot housing markets—like DC. But in places w/less crazy housing markets you might do well to find a HUD home; get it cheap, fix it up, live there a couple of years, sell and make a bundle. Why not? We all need a place to live...
Posted October 11, 2005 09:59 AM | 3L
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as someone who is living through a (yearlong, ongoing) renovation, I have to tell you that while the "fixer-upper" thing sounds fabulous on paper, most (meaning many) folks are not equipped to do that sort of thing. Even with HGTV and DIYNetwork.
Trust me on this one.
Posted by: Katherine at October 11, 2005 01:11 PM
And the fixing-up part is a lot easier if you're also not living in the house at the time. (As I'm sure you might already realize from your home improvement projects!)
Posted by: raquel at October 11, 2005 01:27 PM
Don't forget about that pesky bubble. Too many people are walking on it right now and it's getting ready to pop.
Posted by: Reckless Murder at October 11, 2005 09:27 PM
It is very important to pay attention to each individual market rather than speculation of interest rates and a national economy. In Denver, for example, during the last few years new home purchases have increased at a higher percentage than fixer-uppers. In Kansas City, doubling your total investment on a remodel can happen in a few months, but "flipping" requires hiring quality, timely and affordable contractors to work beyond any do-it-yourself projects. The process of finding, interviewing and evaluating estimates can be time consuming so much that I've made it my full time job. At one time I thought I could also handle all processes of written contracts, leases and agreements myself, but after an average of labor intensive 60-80 hour weeks, I've learned to keep an attorney on retainer!
Posted by: Aaron at October 13, 2005 01:38 AM
Heh Flipping houses is the new reality show deal. There are tons of them on now.
Posted by: Melissa at October 14, 2005 01:43 AM
Newsday.com, November 18, 2005
Don't slash student loans
Making it too costly to go to college is no way to solve deficit problem
A very significant portion of the college students in our region depend on student loans, says Dr. Robert A. Scott, president of Adelphi University. So it will be very painful to New York students and their parents if the Republican leadership in Congress succeeds in taking a chainsaw to the federal loan program. A bill under consideration in the House, aimed at cutting the deficit by $54 billion over five years, would whack almost $15 billion from the program. (Read more ...)
Posted by: jeepee at November 18, 2005 09:59 AM
