I was out in Las Vegas last week along with a few relatives to visit my cousin — and to see the house he’s buying. We all piled out to the suburbs to see the new place.

The new house is still in the process of being built. My cousin is getting it basically because the original purchasers had some problems with getting a mortgage due to the credit crunch. The builders dropped the price to find a new buyer before the place is done. Of course, we are talking about the Las Vegas real estate market, which is still pretty high-priced despite economic turbulence.

For a little under $200K, my cousin is getting a house that literally has about 100 square feet more than his current apartment and a cement patio out back. And I’m of the opinion that he’s also get a generally bad deal.

I have a few cardinal rules for house buying — and my cousin is breaking just about all of them.

Make a 20% Down Payment

While there are times when it’s worthwhile to be flexible on a down payment, generally paying at least 20% of the price up front will make your mortgage much more comfortable. The ability to afford a decent down payment can also act as an indicator of whether you’ll be able to comfortably afford the house in the long run.

My cousin’s breaking this rule — he can’t afford any kind of down payment. And it’s harder to get those ‘no money down’ loans these days. My cousin’s down payment is coming from helpful relatives, instead.

Plan to Stay Long Enough to Build Equity

One of the great things about buying a house is equity: by making mortgage payments, you can build up a little personal worth. But you have to take the long view when it comes to equity: the first couple of years you’re in a house, the majority of your payments go to interest. I’m firmly of the opinion that, if you plan to move to a new house in less than four years, you should just stay in a rental.

My cousin is guaranteed to be in his new house for another three years, but he’s planning on leaving Las Vegas — and selling the house — after that. It isn’t absolutely certain yet, but it is extremely likely.

Make Payments You Can Afford

One of the reasons for the current credit crunch is the fact that so many people took on mortgages that they couldn’t afford in the past several years. While some people can figure out a way to make payments that seem out of their price range, most people can’t.

My cousin is in school currently, and has minimal income, beyond student loans that he can use for housing. He’s planning to use the money from his loans to make his monthly mortgage payment — just passing the debt from one pocket to another.

My Cousin Doesn’t Have the Financial Footing to Buy a House…

…but he’s buying one despite recommendations to the contrary.