Buy a Home with Less Than $25K? Here’s How!

🔍 Episode Summary:

Think buying a home in Portland is out of reach? Think again. In this episode of Off the Record: Talking Real Estate with Joe and Makayla, we break down exactly how you can buy a home in the Portland metro area with less than $25,000 out of pocket. From creative strategies like seller credits and rate buydowns to real-life numbers using a live mortgage calculator, Joe and Makayla walk you through everything you need to know to turn your homeownership dreams into reality—no fluff, just facts.

💡 Episode Highlights:

• 💸 Breaking Down the $25K: How your down payment, closing costs, and more can fit within that budget.
• 🏡 What $500K Gets You Today: Over 450 detached homes qualify—see where and how to find them.
• 📉 Seller Credits & Rate Buydowns Explained: Make your offer stand out and save on monthly payments.
• 🔑 First-Time Buyer Tips: Why your first home doesn’t need to be your dream home, and how equity can build fast.
• 📍 Neighborhoods to Watch: From North Portland to Newberg, discover budget-friendly spots still FHA-loan friendly.
• 📊 Real Numbers from a Live Mortgage Calculator: See how a 6% interest rate and a $3,479 monthly payment could be within reach.
• 🏗️ Building Equity in 3-7 Years: How even a modest home can launch your financial future.

Ready to see what’s possible for your budget?
Visit LivPortland.com to explore listings under $500K, get connected with trusted lenders, or schedule a no-pressure strategy session with our team.
👋 Let’s turn your “maybe someday” into “let’s do this!”

Thank you for listening to this episode. Stay up to date on the latest trends and insights by subscribing to our podcast and following us on social media.

For more information about buying or selling in the Portland Metro real estate market, please visit www.LivPortland.com or contact us directly.

We appreciate your feedback, so please leave a review and let us know what topics you would like to hear more about.

Transcript

 00;00;08;21 - 00;00;25;03

Joe Reitzug

Welcome to Off the Record talking real estate with Joe and Makayla. If you're interested in the Portland, Oregon real estate market and want the unvarnished inside scoop, you've come to the right place. Thanks for giving us a listen. Okay. Welcome, everyone. Thanks for joining us. Good afternoon. Makayla.

00;00;25;08 - 00;00;26;11

Makayla Mast

Hi, Joe. How are.

00;00;26;11 - 00;00;31;06

Joe Reitzug

You? It's a Friday. I had a wonderful lunch at Happy Tulips.

00;00;31;08 - 00;00;32;21

Makayla Mast

Never a disappointment.

00;00;32;23 - 00;00;45;09

Joe Reitzug

No, not at all. The pearl does not disappoint. For good food. So, coming from the Cascade House and Sotheby's studios here down in the Pearl district, it's a wonderful, beautiful, sunny day here on this Friday.

00;00;45;10 - 00;00;46;04

Makayla Mast

You really is.

00;00;46;05 - 00;00;47;18

Joe Reitzug

Can be happy to be here with you.

00;00;47;20 - 00;00;54;03

Makayla Mast

Oh, likewise. Yeah. Nice little Friday afternoon leading into the Easter weekend. I know.

00;00;54;03 - 00;01;11;25

Joe Reitzug

I know, it's it's going to be a good weekend. I think so, but we've got a fantastic show for everyone. And I am excited for you to lay out what we've got here. We're talking today about buying a home with under $25,000 cash. How in the heck are you going to do that?

00;01;11;28 - 00;01;12;22

Makayla Mast

We're going to do it.

00;01;12;26 - 00;01;13;11

Joe Reitzug

Wow.

00;01;13;12 - 00;01;14;17

Makayla Mast

And there's options.

00;01;14;18 - 00;01;18;07

Joe Reitzug

There are options, but you lay it out for us. What are we looking at here?

00;01;18;08 - 00;01;47;13

Makayla Mast

Well, I'm buying a home in today's market feels very out of reach. And we understand that the media is telling you lots of scary things. But we did some research, and we believe that it is possible to buy with 25,000 or less. We're going to break down the real numbers from a live mortgage calculator, walk you through some creative strategies like using seller credits to write down your interest rate, and also showing you how many homes are actually available right now for under 500,000, which is more than we thought.

00;01;47;14 - 00;02;09;15

Joe Reitzug

And not only is it possible, but our clients are actually making it happen. And I agree with you. There's so much kind of angst and especially like I have two sons in their early 20s right now and the feeling they want to be homeowners. You know, they've watched their mom and dad for 30 years being real estate professionals and just talking to them and their friends.

00;02;09;15 - 00;02;23;18

Joe Reitzug

You can feel that they're like they feel it's not attainable. It's it's an interesting time. But I think this hopefully, you know, people watching it out there will get some hope from this. If you're in that situation and get a few pointers as to how to make that happen.

00;02;23;21 - 00;02;41;06

Makayla Mast

I think it's something that's worth mentioning is that we don't gain anything from getting bad advice, or fudging numbers or making this up. We are working in this profession day in and day out. We love it and we are going to be honest with you because what else is the point?

00;02;41;09 - 00;02;58;23

Joe Reitzug

Yeah, it doesn't do anything. Anyone any good to get bad information and then find out that they can't make it happen. That being said, you need to come to the table with certain things to make this happen, and that includes some money and also a credit score that's going to work for the lender.

00;02;58;25 - 00;02;59;04

Makayla Mast

00;02;59;09 - 00;03;14;27

Joe Reitzug

That's the beautiful thing about talking to your financial professional or your real estate professional up front is getting that plan in place. Just because maybe those things aren't there now doesn't mean that you can't have a strategy for having them in place in a very short period of time. Should we.

00;03;14;27 - 00;03;15;19

Makayla Mast

Talk numbers?

00;03;15;20 - 00;03;16;22

Joe Reitzug

Let's talk some numbers.

00;03;16;23 - 00;03;42;12

Makayla Mast

Okay. I wanted to just dive right into it. So we are considering we kind of worked backwards on this mortgage calculator, which is not what we usually do, but I wanted to consider the fact that we're working with 25,000 or less. And the thing to remember here is that this amount, 25,000, is going to include your down payment and also your lender associated closing costs, because that's something that people don't always consider.

00;03;42;12 - 00;04;09;03

Makayla Mast

So that means that your down payment will be around 17,500. And that's 3.5%, which is FHA minimum for a purchase price of 500,000. So in this scenario, we're considering a purchase price of 500,000 or less. Of course, if you find something less than 500,000, then these numbers will look a little different and vice versa. Then we consider the closing costs to be around 7500, which I believe could be less.

00;04;09;05 - 00;04;17;12

Makayla Mast

We didn't want to give you you know, we wanted to give you an approximate amount because that's not our profession and that's not what we do. We don't want to make promises that we.

00;04;17;12 - 00;04;27;14

Joe Reitzug

Can't all but all of these are general numbers. Some are going to be higher, some are going to be lower. But this is a good working set of numbers that you can feel good about moving forward. Right?

00;04;27;16 - 00;04;57;15

Makayla Mast

Definitely. And then considering the interest rate, which is a hot topic right now, I plugged in 6%. And I do believe it is possible to get there with today's current interest rates being around 6.75 a little bit higher. So on some days what we are going to do in this scenario is ask for a seller credit in your offer, and we're going to use that seller credit to buy down the interest rate to 6%, which is feasible and very possible and happening all of the time.

00;04;57;15 - 00;05;09;10

Makayla Mast

But we also included private mortgage insurance, which is half a point in this scenario, property taxes as well, around 3100, which is a little low. That was what the calculator.

00;05;09;10 - 00;05;28;04

Joe Reitzug

Generally depends on what part of town you're looking at. Is it Multnomah County? Multnomah County does have the highest property taxes in the tri county area. Clackamas, Washington County much lower. And then if you go out to other places. So this is an approximation. But, you know, could be higher it be lower, right.

00;05;28;07 - 00;05;45;09

Makayla Mast

So if you're, you know, if you are finding homes that you're in love with in the area that you live in, the property taxes are a little bit higher. Maybe we consider a purchase price of 475 to offset that cost. And then we account for insurance, which is necessary for 1500 a year. And we did a loan term of 30 years.

00;05;45;09 - 00;05;48;03

Makayla Mast

You want to reveal what their monthly payment will be with this scenario?

00;05;48;09 - 00;06;27;11

Joe Reitzug

3479 okay. Which obviously the more money you put down, the lower that amount becomes. So this is getting in for under 25,000 and getting that payment out of that for a lot of people, they're going to be like 003 thousand $500. That is a lot. Yes it is. That being said, if that's all you have, if you have a good job and good credit score, good or better credit score and not a lot of debt, revolving debt especially, this is going to be a number that, you know, maybe something you can work with and a reminder as if you're planning ahead and have a strategy.

00;06;27;12 - 00;06;44;21

Joe Reitzug

Maybe this is the six month plan. And if you decide, well, we're going to move that to a 12 month, maybe you go 5% down, 10% down. This number will go down the more you put down as your down payment. The other thing right now is interest rates are and this is not a bad thing people. This is a good thing.

00;06;44;21 - 00;07;12;22

Joe Reitzug

Extremely volatile. I mean they are up and down significantly. Some of you may not be watching the news or anything, but our foreign policy and some of the things that we're doing are creating a very uncertain atmosphere in the economy. And that causes our our mortgage rates and the bond market and those type of things to fluctuate drastically, which for a mortgage professional is extremely difficult.

00;07;12;22 - 00;07;13;22

Makayla Mast

You know, those poor.

00;07;13;26 - 00;07;36;04

Joe Reitzug

Guys, right? And gals. But for you as a consumer, it allows you to really lock in on one of those low dips before it spikes back up again. So a lot of opportunity out there right now. So let's talk about the power of seller credits. Because early on you know you were throwing out some things about buy downs and seller credit and all that.

00;07;36;04 - 00;07;46;06

Joe Reitzug

And I think there's probably a lot of our listeners who are not familiar with some of those terms. And so I think it's worth it to us for us to discuss exactly what that means.

00;07;46;06 - 00;07;49;10

Makayla Mast

Right. So seller credits are a beautiful thing.

00;07;49;12 - 00;07;50;09

Joe Reitzug

I love them.

00;07;50;11 - 00;08;18;22

Makayla Mast

If you let's say the home is listed at 500,000. What we do is in your offer. So say we offer 500,000. In your offer, we write in seller credit. So whatever that amount is our asking for, we'll write that in the offer. And then at closing the seller will pay you back that money or pay your lender back that money so that you can use that amount to close the loan or close the loan, meaning your closing costs, or buy down the interest rate.

00;08;18;22 - 00;08;19;13

Makayla Mast

That's it.

00;08;19;15 - 00;08;35;22

Joe Reitzug

But yeah. So a good way of looking at it is if, let's say the home is a $500,000 home, you make an offer at 500, but you're going to ask for a $15,000 off. That real net offer to the seller is 45, because that's all they're going to.

00;08;35;25 - 00;08;37;02

Makayla Mast

That's that's what they care about.

00;08;37;03 - 00;08;51;09

Joe Reitzug

Yeah, that's what they care about. But at 500,000 you're still giving them that amount. And they're paying you that back that 15,000 at closing for you to be able to use towards closing cost or, you know, buying down the rate, that type of thing.

00;08;51;09 - 00;09;09;15

Makayla Mast

Right. And we are seeing this very commonly in this market. Homes are hanging out on the market a little bit longer. Some are some aren't. But the ones that are more often than not, sellers are willing to pay some kind of credit in order to get their home sold. And they're getting the price that they want, which is exciting to them.

00;09;09;15 - 00;09;32;28

Makayla Mast

Just because public record shows that, you know, it sold for 500,000. And I think sometimes that's nice for people to instead of having a price cut price cuts can, be hard on sellers. So but, you know, with properties that are a little more competitive, if there's multiple offers, our strategy would be to maybe offer a little bit over 500,000 and then still ask for that credit.

00;09;32;28 - 00;09;50;12

Makayla Mast

You know, that way you can make sure things pencil out and the difference in your monthly payment between 500,000 and 515 is likely $20 or less. So yeah, we run all those numbers for you a lot of different scenarios before we make your offer to make sure it pencil out and make sure you pay.

00;09;50;12 - 00;10;01;28

Joe Reitzug

Your financial professional, your mortgage broker will be able to give you a number of different scenarios beforehand to see exactly how that plays out. As far as the actual monthly payment, I.

00;10;01;28 - 00;10;18;05

Makayla Mast

Think in this scenario too, if, you know, maybe there's an opportunity where you can ask for money for a rate buy down and all of your closing costs. Yeah, meaning that you could spend that whole $25,000 on your down payment. Hopefully that's not too much information, but it's a lot of numbers.

00;10;18;07 - 00;10;39;19

Joe Reitzug

The other thing is this is one of those episodes I think, that bears repeating. If you have questions, reach out. You know, if you guys want to talk about this, your interested. But it's all kind of like, well, my situation's a little different or I didn't quite get what you meant by that. Yeah. You know reach out and call either Makayla or I if you want to talk to a lender.

00;10;39;19 - 00;10;55;07

Joe Reitzug

You don't have anyone, you know, a mortgage broker that you have as a trusted professional, we are more than happy to give you the name of 1 or 2 that we work with all the time and trust implicitly and are great at what they do.

00;10;55;07 - 00;10;55;24

Makayla Mast

Oh, yeah.

00;10;55;26 - 00;11;21;21

Joe Reitzug

And that's that's, you know, something? We're happy to do, but let's actually talk about what's available right now, because I think a lot of people are like, okay, yeah, I get that. We can afford to do this. We can buy something 25,000 or less, but there's nothing available. Joe. Mikayla, there's just nothing where I live that's available. And so why don't you tell them what the facts are?

00;11;21;25 - 00;11;42;02

Makayla Mast

This was fun to look into. So I did the greater Portland metro area. I also included Columbia County and Yamhill County. So that's a little bit further out. But I wanted to give a big circle properties that are only active, of course, 500,000 or less. And then we also only added detached properties. So this does not include condos and townhomes.

00;11;42;04 - 00;11;52;05

Makayla Mast

And then I did terms FHA. So a property that I would accept an FHA loan, which is what we're talking about. And we get 451 hits from that.

00;11;52;08 - 00;11;54;17

Joe Reitzug

451 homes.

00;11;54;18 - 00;11;55;10

Makayla Mast

Amazing.

00;11;55;10 - 00;12;01;09

Joe Reitzug

Now obviously some areas are going to have a larger portion of those than others, but that is incredible.

00;12;01;10 - 00;12;13;19

Makayla Mast

It is. And they really are all over the map. There's a lot in North Portland, and the east side of Portland in general takes a long time for my listings to load, but I will talk about the areas where there's.

00;12;13;22 - 00;12;32;20

Joe Reitzug

A lot of, you know, Canby, Oregon City, the mascot's Happy Valley, Cornelius, Forest Grove, Carleton, love, Carleton. If you don't know where Carlton that you should definitely take a look. It's out in wine country for one, but it is the cutest little town and I just love it so much.

00;12;32;23 - 00;12;45;03

Makayla Mast

This. Also not to interrupt, you included McMinnville, Amity, which is a little further out, but there's a ton in Newberg which is closer in Scappoose, Saint Helens, Monona North.

00;12;45;07 - 00;12;46;08

Joe Reitzug

And Portland.

00;12;46;08 - 00;12;47;05

Makayla Mast

Yeah. And then there's.

00;12;47;07 - 00;13;32;28

Joe Reitzug

Portland, Maine, Beaverton, Hillsboro, North Plains, Oregon, Haggard, Gresham, all of those areas have properties that are available right now. The thing I wanted to know, though, Makayla was okay, we're talking about having a seller pay for your financing. Basically pay for your closing cost and your buy down. And not all of those 451 homes. Like if someone's brand new on the market the first day on the market and they're getting a ton of showings, chances are they might be hesitant to to get an offer that says, hey, we listed at 500,000 and you want us to take an offer at 45 net to us, and we're going to hold on for a little bit.

00;13;32;28 - 00;13;47;02

Joe Reitzug

Right? And that's probably good advice from their broker. Absolutely. That's what we would say. So let's look at how many homes have been on the market for 30 days or more. Out of those 500 or 451 and that total is.

00;13;47;04 - 00;13;48;15

Makayla Mast

318.

00;13;48;15 - 00;13;53;04

Joe Reitzug

318 of those homes have been on the market for 30 days or more.

00;13;53;04 - 00;13;54;16

Makayla Mast

That is still amazing.

00;13;54;16 - 00;14;00;19

Joe Reitzug

And, you know, I would even say 21 days or more. Yeah, they've been on the market three weeks.

00;14;00;21 - 00;14;03;02

Makayla Mast

It's time to ask for some credit.

00;14;03;06 - 00;14;10;20

Joe Reitzug

So at that point they're going to be happy to sell I think. So if I updated to 21 days it's 371.

00;14;10;25 - 00;14;11;27

Makayla Mast

Wow.

00;14;11;29 - 00;14;12;18

Joe Reitzug

Yeah.

00;14;12;21 - 00;14;13;15

Makayla Mast

That's crazy.

00;14;13;15 - 00;14;38;18

Joe Reitzug

Crazy. So 371 of the 451 have a extremely high probability of accepting an offer with a credit attached, you know, and maybe there's some negotiation there. If it's listed at 500 and you go, okay, we want to get 15,000 of, closing cost by a rate Paydown paid for that offer. And they don't want to do that. The seller doesn't.

00;14;38;18 - 00;14;42;27

Joe Reitzug

Okay, maybe we go 505 with a net of 4 or 90 to them.

00;14;43;00 - 00;14;45;04

Makayla Mast

Chances are they're going to be willing to work with you.

00;14;45;06 - 00;14;50;24

Joe Reitzug

Yeah. Yeah. So it's a good strategy. There's a lot of homes available.

00;14;50;26 - 00;15;11;29

Makayla Mast

One thing I like to remind people of, too, when we're talking about first time homes, is this might not be your dream home. And while that might feel a little disappointing, that's okay. You know, I would suggest finding a home that you could put some equity into, even if it's just little things over time. And then we talk about the rule of 5 to 7 years.

00;15;11;29 - 00;15;18;22

Makayla Mast

So after that amount of time, you're going to have enough equity in your home to sell that home.

00;15;18;22 - 00;15;24;15

Joe Reitzug

And minor one 5 to 7 is a safe assumption. 3 to 5 years sometimes is also.

00;15;24;16 - 00;15;25;17

Makayla Mast

Depending on the market.

00;15;25;19 - 00;15;44;10

Joe Reitzug

Depending on the market, depending on the home. That's a conversation with your real estate professional to say, how have homes appreciated in this area? How have similar homes appreciate it? If you're buying the smallest home in an area of higher priced homes, you're going to appreciate faster than if that home was in a neighborhood where it was all the same as them.

00;15;44;10 - 00;15;45;00

Makayla Mast

Exactly.

00;15;45;00 - 00;16;03;21

Joe Reitzug

Right. So there's some factors in there. So maybe even 3 to 5 years. And depending on what you do, if you have additional money and you go in and do some things to the home that really create value in the marketplace, it could be sooner than that as well. So you don't need a $100,000 in the bank, do you, Makayla?

00;16;03;24 - 00;16;05;07

Joe Reitzug

Know what you're telling me?

00;16;05;10 - 00;16;08;00

Makayla Mast

That's what I'm telling you. Wow.

00;16;08;03 - 00;16;09;20

Joe Reitzug

That's awesome.

00;16;09;22 - 00;16;13;07

Makayla Mast

We hope this is useful. Let us know if you have any questions, please.

00;16;13;10 - 00;16;29;28

Joe Reitzug

Yeah. And you can visit our website LivPortland.com. That's LivPortland.com. And you can see the show notes here. We'll have some information. I do want to give a shout out to Vantage Mortgage Group there. Live mortgage.

00;16;30;00 - 00;16;30;23

Makayla Mast

Rate calculator.

00;16;30;23 - 00;16;39;27

Joe Reitzug

Rate calculator on their website is fantastic. It is wonderful. We're going to put that link on our website. I think we can do that can't we?

00;16;40;00 - 00;16;40;18

Makayla Mast

Yeah.

00;16;40;21 - 00;16;59;09

Joe Reitzug

Yeah. So, Todd, get us an advantage. Mortgage Group is one of our premier lenders that we work with. He's fantastic, has been fantastic for ever and ever. Will get his permission to put that on the site. I highly recommend visiting and checking it out just for nothing else for that, but we'll have some other research resources on there as well.

00;16;59;09 - 00;17;05;26

Joe Reitzug

So go to LivPortland.com, click on the podcast button and enjoy.

00;17;05;28 - 00;17;06;25

Makayla Mast

Where you go.

00;17;06;28 - 00;17;08;05

Joe Reitzug

Okay. Well it's been a pleasure.

00;17;08;05 - 00;17;09;12

Makayla Mast

It's been a pleasure. Thanks, Joe.

00;17;09;17 - 00;17;11;22

Joe Reitzug

Yeah. Enjoy your weekend.

00;17;11;24 - 00;25;49;22

Makayla Mast

Thanks for joining us today. If you're interested in finding out more about Joe, myself or the LivPortland team, you can go to LivPortland.com. Thanks for giving us a listen and see you next time on the Off the Record podcast.