Posted on: 14th Jun, 2008 06:10 pm
I am co-owner on 2 seperate homes.
Home #1 in Virginia we owe $77000 @ 6%, $700 monthly mortgage and renting for $850 monthly $85 to property manager...Equity is not 100% clear but high $194,000 to low 174,000 according to ditech.com
Home#2 in Florida we owe $64,000 at 7.25% ex-wife lives there and paying mortgage $700 Equity $134000 - 154000 according to ditech eappraisal.
i am sure the ditech #'s are not really accurate, but would like to know what I should do for the time being as I am strapped for cash in general. 7000 in credit card debt and 9000 in auto loans. and monthly bills gas electric etc hindering my spending ability and possibility to purchase a home here in california at a great price and rate in the net 6 months. Help please. D
Home #1 in Virginia we owe $77000 @ 6%, $700 monthly mortgage and renting for $850 monthly $85 to property manager...Equity is not 100% clear but high $194,000 to low 174,000 according to ditech.com
Home#2 in Florida we owe $64,000 at 7.25% ex-wife lives there and paying mortgage $700 Equity $134000 - 154000 according to ditech eappraisal.
i am sure the ditech #'s are not really accurate, but would like to know what I should do for the time being as I am strapped for cash in general. 7000 in credit card debt and 9000 in auto loans. and monthly bills gas electric etc hindering my spending ability and possibility to purchase a home here in california at a great price and rate in the net 6 months. Help please. D
Obviously any of those scenarios would help with the problem and you have a tough choice to make.
Heres what I suggest
Because you are in CA and have a property in VA where you have a lot of equity I would look at selling that one. Heres why. As it is now it is barely making you any money. One month of vacancy means a year worth of profit. If you refi it you may end up having to come out of pocket to cover the overage as the new payment will go up.
If you sell you can eliminate the debt, the cross country landlord issues and have some money to helpo you buy here in California where prices are good but still not cheap.
That of course is just a suggestion as you could probably make an argument for refinancing as well.
Good Luck
Where are you in CA? I am in the Bay Area Just curious
Brian
Heres what I suggest
Because you are in CA and have a property in VA where you have a lot of equity I would look at selling that one. Heres why. As it is now it is barely making you any money. One month of vacancy means a year worth of profit. If you refi it you may end up having to come out of pocket to cover the overage as the new payment will go up.
If you sell you can eliminate the debt, the cross country landlord issues and have some money to helpo you buy here in California where prices are good but still not cheap.
That of course is just a suggestion as you could probably make an argument for refinancing as well.
Good Luck
Where are you in CA? I am in the Bay Area Just curious
Brian
I agree with you in part Brian. I would definately sell the property in VA since you seem to have no morale obligation to that one and you have quite a bit of equity there. But instead of using the proceeds to buy your new home I would use them to pay off your mortgage in FL, auto and credit card debt. That means you'd only need to get $157K for the VA home and in this market you are better off selling at a lower value than whats its worth if you want it to sell quickly. Not only would you be eliminated all of your monthly bills you would be creating a second income from renting the property in FL.
The choice ofcorse is yours but I always say the less debt the better!
Best of luck! :D
The choice ofcorse is yours but I always say the less debt the better!
Best of luck! :D
hi dna_isus,
welcome to our community forums.
are you comfortable with refinancing the property in which your ex-wife stays? i mean if you can do a cash out refinance on it, then with the extra cash, you can pay off a part/whole of your credit card debts. by the way, do you intend to keep your name on the title to this property? only then will a cash-out refinance make sense. otherwise selling off one of the properties is an option worth considering.
get an idea about the home sale market in your area both in florida and virginia and then decide which one you wish to sell keeping in mind the total debt you owe on each property. also check out the rates before you refinance. it's not worth refinancing if the market rates aren't lower than that of your existing mortgage. and, i suggest that you proceed to buy the new home only after you've cleared a major part of the debt including the mortgages, credit card debts and auto loans.
if you have further queries, please don't hesitate to ask.
regards,
jessica.
welcome to our community forums.
are you comfortable with refinancing the property in which your ex-wife stays? i mean if you can do a cash out refinance on it, then with the extra cash, you can pay off a part/whole of your credit card debts. by the way, do you intend to keep your name on the title to this property? only then will a cash-out refinance make sense. otherwise selling off one of the properties is an option worth considering.
get an idea about the home sale market in your area both in florida and virginia and then decide which one you wish to sell keeping in mind the total debt you owe on each property. also check out the rates before you refinance. it's not worth refinancing if the market rates aren't lower than that of your existing mortgage. and, i suggest that you proceed to buy the new home only after you've cleared a major part of the debt including the mortgages, credit card debts and auto loans.
if you have further queries, please don't hesitate to ask.
regards,
jessica.
Hi Dna_isus,
Hmmmm lets see two performing assets that we want to possibly sell or refinance…. As a general rule of finance and investing typically selling a performing asset especially real estate is the last thing you would want to do. Even though they appear not to be generating that much they do have “positive cash flow†real estate investors search hard for those types of rental properties.
Given current market conditions selling should be your last resort, because you would be selling a performing asset at the bottom of the market.
I agree with Jessica if you absolutely need cash refinancing would be your best option. Especially given rates are at their lowest and are only going to go up from this point. In other words to refinance at this point would be a good “business decision.â€
If you can make it through this tough time I would not touch the real estate. In addition California is one of the most battered markets right now. So it would not be prudent to purchase a house in California unless you are sure that the worst is behind the real estate market you are looking to buy in.
Hmmmm lets see two performing assets that we want to possibly sell or refinance…. As a general rule of finance and investing typically selling a performing asset especially real estate is the last thing you would want to do. Even though they appear not to be generating that much they do have “positive cash flow†real estate investors search hard for those types of rental properties.
Given current market conditions selling should be your last resort, because you would be selling a performing asset at the bottom of the market.
I agree with Jessica if you absolutely need cash refinancing would be your best option. Especially given rates are at their lowest and are only going to go up from this point. In other words to refinance at this point would be a good “business decision.â€
If you can make it through this tough time I would not touch the real estate. In addition California is one of the most battered markets right now. So it would not be prudent to purchase a house in California unless you are sure that the worst is behind the real estate market you are looking to buy in.
If the property if refinanced it is no longer a cash flowing property and becomes a liability. Otherwise I agree cash flowing RE investments are a great thing.
As far as prices in CA the markets are very regional. But the story lately seems to be the same. Multiple offers and banks getting full price or more when they list their properties. Of course the banks are the only ones selling anything as they have undercut the market so bad the only person who will try to compete in this market is the one that has to. I personally think we have seen the worst of it and the bottom will not get much lower on the bottom end starter type homes. Of course these were the homes hit the hardest. Talking to Realtors all over the state this seems to be the theme in most areas. Investors and first time buyers are jumping into the market and these deals are being grabbed up quick.
OP Good Luck which ever way you go....
Brian
As far as prices in CA the markets are very regional. But the story lately seems to be the same. Multiple offers and banks getting full price or more when they list their properties. Of course the banks are the only ones selling anything as they have undercut the market so bad the only person who will try to compete in this market is the one that has to. I personally think we have seen the worst of it and the bottom will not get much lower on the bottom end starter type homes. Of course these were the homes hit the hardest. Talking to Realtors all over the state this seems to be the theme in most areas. Investors and first time buyers are jumping into the market and these deals are being grabbed up quick.
OP Good Luck which ever way you go....
Brian
brian, thanks for that last post. we've read about the banks bottoming out on their asking prices, but it hasn't happened here, so this is some new news. i hope you're right about the market in general, and if so, that would be some welcome and good news.
oh...i really had nothing to add of value to the sell/refinance/buy questions raised initially. i think there is some good advice there to pluck from.
I guess I'm just too cautious but I still will say pay off your debts, don't accumulate more. I just don't understand why you would borrow more money from one place just to help pay for another. Either way debt is debt. What if you were to loose your job and have trouble finding another good paying job? What if your renters have to move and you are having trouble finding new renters?
Better safe than sorry!
Better safe than sorry!
OMG, I didnt expect to get such great insight so promptly. Thank you all for your posts here.
I plan to go and read each of your posts another 3 times each minimum and digest and filter your comments. I will keep you all posted on what I do as time goes on and the outcome. Thank you all sooo much. D
I plan to go and read each of your posts another 3 times each minimum and digest and filter your comments. I will keep you all posted on what I do as time goes on and the outcome. Thank you all sooo much. D
Go to WELLS FARGO and get stand- alone 2nd mortgages on both properties, for $20k each. You'll have cash, you can payoff the CCs, and you can pay the mortgages with the remaining 'kitty' for the next few months so you can breathe easier. Otherwise, refinance both properties with WACHOVIA's portfolio products with some cashout.
Raise the rent on the ex-wife, if possible.
Raise the rent on the ex-wife, if possible.
Wow Great discussion!
If you don't mind me asking Chuck, what kind of rates are wells fargo offering to make you so confident in recommending them? Any closing costs involved?
By the way, I really like the idea of raising the rent... :lol:
By the way, I really like the idea of raising the rent... :lol:
My original e-mail was not as detailed as it should have been about the home the ex-wife is living in.
I actually co-signed with her back in 1999. So I dont own it outright. The mortgage is being paid on time so Im not too concerned and she is willing to work with me on options that deal with refinancing so as to get me off the mortgage, and i know I have 1/2 right to the equity built up at this point and she acknowledges that point also.
I checked with my prop-mgr in Va and the rental lease is until march of 09, and I got a CMA and it is 180,000-194,000 which is double what we paid in 2001
I actually co-signed with her back in 1999. So I dont own it outright. The mortgage is being paid on time so Im not too concerned and she is willing to work with me on options that deal with refinancing so as to get me off the mortgage, and i know I have 1/2 right to the equity built up at this point and she acknowledges that point also.
I checked with my prop-mgr in Va and the rental lease is until march of 09, and I got a CMA and it is 180,000-194,000 which is double what we paid in 2001
Thats make me think even more you should sell in VA.... That is not a good rent to value ratio.
A good investment property should be close to 1% rent vs sales price. Now if it was worth $85,000 you would be spot on. VA hasnt been hit as hard cash that one in and find something closer that is a better money maker. And get yourself a home in CA.
Good Luck
Brian
A good investment property should be close to 1% rent vs sales price. Now if it was worth $85,000 you would be spot on. VA hasnt been hit as hard cash that one in and find something closer that is a better money maker. And get yourself a home in CA.
Good Luck
Brian