“I just read SD Realtor’s post and think we will need every penny we have for a downpayment as the market is going up again”
Be careful with the thought that the market is going up again and you are going to be priced out. The market has seen a nice pop in the spring & summer months for homes under $500k in good areas of San Diego, but I think that most agree it won’t continue to skyrocket back up. Greater chance it will fall back on stabilize.
Keep your part time job for a few more years and pay someone $20-$30k yr to help you with the kids. Keep in mind the condo in Tempe could take 5-10 more years to bounce back to a price where you would break even after fees, but if its in a good part of Tempe it should bounce back in 5-10 yrs.
Work harder on renting it. Its hard to believe an ASU student or young professional wouldn’t pay $750 mo. How are you posting the rental? It might not be as easy this year to find someone (especially at $1k mo) but you should still be able to find somebody.
If not…try short sale. If you owe $120k and sell for $80k you will have to come up with approx $6k in closing costs and fees, so you are actually bringing more than $40k to the table and have already lost $20k down payment if you get out now.
Way I see it, you have 3 options if its a non recourse loan.
1. Stop paying now and just lose your down payment and credit ($20k loss)
2. Rent unit for next 5-10 yrs at approx $250 mo loss ($15k-$30k spread over 5-10 yrs)
3. Sell now for $80k. ($65k loss)
If you wouldn’t be able to sleep at night if your credit was bad (or worried about stress of landlord for 5-10 more years), then just sell it now and hopefully you could get a little more than $80k so loss isn’t as bad. Just know you will have to work a few more years to make it up.
