These pictures are from a trip to Phoenix in 2016, but the blue door and white brick remind me of my favorite condo I found during my search, detailed below. If you're considering buying (or hadn't considered it but your interest is piqued) and have no idea where to start, this post is for you.
Or, of course, if you just want to read about yet another ridiculous and half-baked KG exploit.
#KGsCondoHunt is one of those things that started almost like a, “Hm, that’d be cool; I wonder what that would entail” moment that then escalated really, really quickly.
Some context: I started renting in Dallas in September. Much like real estate in Dallas, rent in Dallas is not cheap. Not only is renting not cheap, it’s also not really a wise use of money (granted, for most people including me, it’s really the only feasible option).
I hate spending hundreds upon hundreds of dollars a month, knowing that by the end of the year, I’ll have absolutely nothing to show for it. Renting is a money pit.
My lease is up in September, and after 12 glorious months of arguing over the cleanliness of our stovetop, Rob and I will be parting ways. This means one thing: I’d be in for a $1,300/month lease on a one-bedroom apartment. No thanks. (For comparison, and because I think being bashful about finance is stupid and why people get into hot water with their money, my current rent is a very reasonable $900/month).
So I started ideating (I love corporate jargon) on what I could do instead. Craigslist roommates were out of the question, but I also didn’t know if I’d have any friends whose leases would be up in September. Now that Ellie is moving here (BLESS), this entire Hero’s Journey could’ve been avoided—but it seemed I’d be looking at a $400+ increase in living expenses with no commensurate salary upgrade on the horizon. I was considering all options. Except for, as I said, the Craiglist roommate.
It wasn’t until I had dinner with my friend Sanam that the once-far off idea of buying entered the equation. Sanam has lived in a one-bedroom for a couple years, and I can’t wrap my mind around how she (or my other friends who do so) makes it work. When I was explaining my dilemma, she mentioned she was considering buying a condo.
I went home that night and found myself perusing Zillow. Two-bedroom condos in Dallas were well in the $200k and $300k range, which seemed exorbitant and ludicrous given my upbringing on Kentucky farmland where $300k could buy you a luxe five-bedroom home.
For starters, I had no idea how buying real estate works. This is an embarrassing admission, but part of me believed you actually had to have $200k to buy a house that costs $200k. Loans, mortgages, interest rates… all were clouded in this fuzzy, abstract fog to me. Regardless, I had visions of owning a 2BR place, renting out the second room, and hosting my own reality show called KG is My Landlord (it’s a working title).
Something about the idea of owning property felt so adult to me. It was so empowering to imagine myself owning a condo and actually profiting from charging a roommate rent that would cover the cost of the mortgage. Most of the mortgages listed on Zillow were around $1,000/mo., and I knew I could easily charge a roommate that much. The idea of eliminating my largest living cost had me spinning in greed and excitement. Little did I know, I only had a very small fraction of the picture.
And this is where things started to pick up pace. I started saving homes on Zillow, but it was still a “Ha, someday!” endeavor. It was interesting how quickly I honed in on my tastes. I loved open spaces with unique elements, like exposed staircases and fireplaces and interior brick, but I also realized I hated dark kitchens. Granite countertops are borderline arousing to me and if the floors are carpeted, I’m not interested.
This is a very particular set of preferences for someone who can comfortably afford a cardboard moving box under an overpass.
And yet, I persisted. At this point, I was still framing this pursuit as ‘getting a feel for what’s out there.’ Like window-shopping, but for the most expensive investment in your life.
I asked Megan and Brandon, my adult married friends, who they used when they bought their beautiful three-story townhome in Uptown. I knew they got a great price on the place, and I was curious how they found it. Luckily, their agent was a family friend, and she and I set up a call.
The call was the first time my efforts started to feel real.
“What’s your budget range?” She asked, presumably a pretty obvious, first-step question for buying a house. But truthfully, I hadn’t thought about how I was going to answer.
“$190k to $290k?” I answered, except I realized it sounded like a question. $100k of wiggle room felt a little ridiculous, but I truly didn’t know how much I could afford (and using a mortgage calculator hadn’t occurred to me yet because, like I said, I didn’t understand how those worked in the first place). I was flying by the seat of my pants.
That answer seemed satisfying enough to Mary, my new real estate agent, because she accepted that answer and moved on to asking where I wanted to live.
“Um, Dallas?” I replied, again, asking. “Basically,” I quickly followed up, “I want to live in Uptown. Or Knox Henderson. Or, really, downtown would be fine too. Um, just IN Dallas.”
Truly, I was knocking this out of the park.
She somehow understood what I meant and told me she’d begin emailing me properties. We agreed we’d go see them in person once we accrued several of interest.
Over the next few weeks, she sent me condos on the market. The range in quality and price was pretty astounding, as well as the rapid rate at which quality shot up as you moved only a couple miles outside of Dallas city limits. A shitty, small, falling-apart two-bedroom condo on the cusp of the hood cost $200,000, but a beautiful four-bedroom home in the suburbs of South Dallas was $215,000. I had never more fully grasped the idea of ‘location, location, location.’
Before long, I had a list of six places that (I assumed) were in my ‘price range’ (again, this was based on literally nothing), and we set up Friday visits. I met Mary for breakfast, and she handed me a folder with all the details: mortgage payments, property tax, HOA fees, insurance, etc. for each place we were about to see.
It turns out that a $1,000/mo. mortgage payment actually turns out to be closer to $2,000 when you factor in the exorbitant Texas property tax and even more ridiculous HOA fees. I saw one condo in a high-rise downtown with a $700/mo. mortgage payment and $1,000/mo. HOA fees. (When I asked why, they said, “Because this building has an elevator and complimentary valet.”)
It didn’t take long that day to realize that people who craft these listings online can work magic with wide-lens cameras and glossy overlays. Places that seemed promising online delivered cabinet doors falling off the hinges and popcorn ceilings from the 70s. I grew discouraged by these places, some of which cost upwards of $250k, but wasn’t even sure what should be considered a ‘deal breaker’ when buying.
Were the heinous oak cabinets enough to kick something out of the running? What about the yellow and blue checkered floor tiles? This one place was all carpeting upstairs, and the stairway bannister was rickety and old—how much would that cost to update? Was this place undervalued or overvalued?
There were so many questions that I felt entirely unequipped to answer, but I was determined to see everything without revealing to Mary how utterly unprepared I felt to be seeing condos and talking realistically about buying one of them.
When our last tour ended, she asked me if I had called the mortgage lender yet to get prequalified.
I stood in silence, staring back at her, and after debating for a few seconds how to answer, I simply just said, “No.”
She explained that when you want to buy property you have to report every single detail about your financial situation to a mortgage lender, who will then assess your net worth, credit score, and the shapeliness of your eyebrows to determine whether or not the bank wants to loan you a few hundred thousand.
This is the point in the carnival ride where I figured I’d probably hop off and wash my hands of the #KGsCondoHunt dream, but for some reason, I felt compelled to keep going. Almost like a, “Well, we’ll just see what I can get approved for. Just to see.”
My parents had advised me to put at least 20% down on whatever I wanted to purchase to avoid additional monthly fees. In case you’re shitty at math like me, 20% of $250,000 is $50,000. That’s just the DOWN payment. Then you’re on the hook every month to keep paying off the damn place. I don’t know who invented this system, but it blows.
Anyhow, I figured I could scrape together $50k by September if I pooled all my savings and took out a loan from the Bank of Mary and Chris, but even then, I wasn’t sure a lender would really take me seriously—a single 23-year-old female who hadn’t started her own company or invented an app, but was for all and intents and purposes extremely average in her financial situation. In some ways, it was really just me thinking, Let me see how far I can take this before a real adult firmly tells me this is impossible.
Fast-forward to Thursday night after work, and I’m on the phone with this lender.
I should’ve known this conversation was not going to end well, because he started the call by saying he had run a credit check and my credit was great—just not very historically significant, given my age.
“Ok, but does that matter?” I asked, somewhat impatiently; I knew I had a great credit score by any measure and was frustrated he was downplaying it. I pay my bill on time every month, dammit!
“No, but one way to make your credit better is to carry a balance on your credit card. Just make that minimum payment every month and pay your credit card bills more slowly over time, rather than all at once.”
There was a pregnant pause.
“So, wait,” I began, incredulously, “You’re telling me not to pay off my credit card every month, and to just pay the insane interest rate on the carried balance? And that that will help my credit score?” I asked.
He launched into this longwinded and only semi-coherent explanation. Candidly, I just knew this guy was full of shit. Why would you ever intentionally not pay your bills on time? I ended up brushing off this topic, telling him I’d do my research and worry about my credit score myself, and to talk me through next steps.
I had to send him all my bank statements for all my checking and savings accounts, pay stubs, W2s, you name it—basically, I had to prove I had the assets and income I was claiming to have. Then, a few days later, he sent me back a document that outlined how much money the bank was willing to lend me, and at what interest rate.
Turns out, the range I had given the realtor was actually fairly spot on. Who knew?
Anyway, Mary (my agent, not my mom) suggested I work with several lenders and repeat the process a few times to see whose rates are the lowest. Again, I didn’t even realize this was a variable thing. I figured you just worked with some suit to facilitate the bank giving you a shit ton of money, and then they proceeded to gouge you for the next 30 years to get their money back and then some.
But no, evidently not. The other lender I worked with gave me a similar rate, but I noticed his ‘closing costs’ were significantly lower, among other things.
(Because yeah, that’s another thing they ding you with: this fuzzy thing called ‘costs at closing,’ where they get another several thousand out of you for inexplicable reasons.) The guy who gave me the shitty credit card advice was going to charge somewhere around $6,000 more.
The other funny thing that happened was this: lenders told me I could put as little as 3% down. And not only did they tell me this, they strongly urged me to put less money down—claiming 20% was ‘too much’ and that ‘nobody did that anymore.’
Obviously, the less money I put down, the more I’d need to borrow—and the more they’d get to charge interest on. It was clear some of them were trying to take advantage of the fact that I was a young adult female who didn’t really know what she was doing.
To offset this, I essentially acted like I knew everything—even when my bravado was completely unfounded. I questioned them incessantly, pushed for lower rates, brought research about national averages into the equation—you name it. And because I didn’t actually know anything, most of this came at the instruction of my father, a middle-aged man who can definitely afford to buy his own real estate and who they definitely would not have tried to bamboozle into something stupid. I’m not even sure whether it made a difference or not, but I was really determined not to come off like an easy mark.
The reality of searching for a place in March and April when you don’t want to buy until September is that nothing you see on the market is going to be around past May, at least in the Dallas housing market. I made the mistake of falling in love with a place that was in a great neighborhood and very reasonably priced, and it was sold six days after it went on the market.
All the lenders said we should touch base again in June or July, once September was closer—but truthfully, I still feel a little like a kid playing house. Moreover, I’m not sure if anything I could technically afford right now is something I’d really want to invest in long-term.
Even though buying is probably more fiscally responsible than continuing to rent for the next 5 years, it’s a delicate cost-benefit analysis: on the plus side, you’re actually spending money every month to own an asset, rather than paying someone else to live in theirs. If you can continue to have a roommate who pays half (or more) of your monthly costs, it may even be cheaper than renting.
But the risks associated are far greater. What if the market tanks? The Dallas housing market is peaking hard right now—my friend’s family in Fort Worth grossed $1M on their home that they bought 15 years ago. That’s unheard of.
Moreover, market tanking aside, owning a house is a pretty permanent thing. You’re in that sucker for the long haul. What if the inspection misses something major and there’s thousands of dollars in repairs to be done? Well, too bad—you just drained your savings on a down payment and now you’re house-rich and cash-poor.
What if you have to go several months (or longer) without a roommate? Now you’re saddled with a $2k monthly payment on a property and, again, your fun money is cut in half. In other words, you better like that house a whole hell of a lot, because that’s where you’ll be spending your Friday and Saturday nights when you can’t afford to have a social life.
It was also constantly in the back of my mind that most people (my mom included) rented until they got married, and then bought a place with their spouse. After looking at the costs associated, I can see how a dual income situation would make this exponentially less stressful. I didn’t want to bank on the fact that I’d be getting married anytime soon, though, and I’m not really keen on renting until I’m 30 years old.
By that time, if you figure a modest $1,000/mo. rent, I’ll have spent $96,000 in rent. Yep, ninety-six thousand dollars. And like I said, that’s modest. Rent’s only continuing to climb upward. What a waste that would be. It occurred to me that the sooner I can buy, the better for my investment growth. But then, it’s back to the market tanking, and…
All that to say—there are myriad factors involved here, and there was a small voice inside my head that told me I didn’t have the capital or experience to deal with them. Luckily, there’s another, equally loud voice that says throwing away $12,000 a year is ridiculous, and I can live with oak cabinets.
It’s hard to say what I’ll end up doing come September. If there’s a killer place at the right price, I still think I’d probably attempt to buy it. In the meantime, I’m going to continue taking advantage of my apartment’s maintenance crew and the fact that when a leak springs in the hallway, it’s not my problem to fix.
The young woman's money guide to all the things you're too embarrassed to ask your friends. Build the life you thought you were too broke to afford through managing your spending habits, travel hacking, and simple, smart investing.
Full-time Brand marketer at Southwest Airlines, part-time Yoga Sculpt teacher, occasional Waffle House Model and reformed materialist.
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