Is this a good idea?
I was advised on another part of this forum to post our situation, so here goes:
We are a late-30s couple who have, until very recently, always been living paycheck-to-paycheck. We have two daughters ages 3 and 1.
We recently entered ourselves in an "affordable homeownership" opportunity, expecting to get turned down, and wound up being offered a 1250 sq ft. condominium in a very expensive neighborhood. The median home purchase is probably around $1M in this town; average condo maybe $600K. The unit we were offered is less than $300K with a $400 a month condo fee. It has a resale restriction, which states that we can make little to no profit when we go to sell it.
We live in a very expensive urban area and have been getting by renting, saving very little, and living paycheck to paycheck. We're not currently living in the aforementioned pricey town, but still live in a relatively affluent nearby neighborhood and pay approx. $1700 a month plus utilities. This opportunity allows us to buy with little down, allows us to build equity, has great schools, and is 2.5 miles from my husband's job. And at the end of the day, the costs will be about the same. It's certainly not our dream home, and we can list many reasons why it's not perfect, but, at the end of the day, I think we will benefit from the forced saving in the form of equity, even if we only stay there for 5-7 years or so. We currently can't afford even the most modest of single family homes in this area, so, in my mind, this is basically our one shot to buy, and it keeps our monthly output at what we're paying for our rental now (which is, sadly, a much bigger and nicer place).
I've been told by my family that I'd be a fool not to take this place, and so far I've agreed, because I can't imagine my other options with such a limited down payment (currently about 10K if we don't touch our retirement incomes). But, maybe I'm being too simplistic? I'm admittedly dumb about money, so any advice is helpful. If you have questions, ask away. This place is not a bad opportunity, but not what we always hoped for (our own small space without shared walls, a yard, etc.), so if there's another way we should look at this, I'd love to hear it.