Condo – sell or rent out?

[Raybyrnes]

CMRJoe

I would look and see if the CHFA loan is an assumable mortgate. If you look to sell it could provide a value add and get you more money for your home. Run the numbers and see what it is worth to save 1.5% on a mortgage. If someone is willing to pay 235k but have to take out a 6.5% mortgage they ahve $1485 monthly payment. With your 4.5% rate you could charge up to 293K and the person would have the same payment. This give you a nice bargaining chip if you find the right buyer. Good Luck

[Anonymous]

I didnt even think about that, great idea.

The CHFA loan IS assumable, the person must meet the requirements for CHFA though. The main requirement is that they are a first time home buyer, and make less than 80k combined or so.

So yeah, if I could find the right buyer, I might not have to sell at a loss afterall. Very cool.

[Anonymous]

I didnt even think about that, great idea.

The CHFA loan IS assumable, the person must meet the requirements for CHFA though. The main requirement is that they are a first time home buyer, and make less than 80k combined or so.

So yeah, if I could find the right buyer, I might not have to sell at a loss afterall. Very cool.

[Anonymous]

I didnt even think about that, great idea.

The CHFA loan IS assumable, the person must meet the requirements for CHFA though. The main requirement is that they are a first time home buyer, and make less than 80k combined or so.

So yeah, if I could find the right buyer, I might not have to sell at a loss afterall. Very cool.

[(former)FormerSanDiegan]

2008 – OK. Since you have good credit and increasing income you have to weigh the potential future prospect of losses and carrying costs versus the guaranteed loss of selling now in the weakest market in over a decade.

Your property is already down 25%. What’s the opportunity cost of spending the 70K to unload the property versus spreading that out via negative income over the next decade ?
Assuming you make less than 150K, you’ll get a decent tax break on the rental loss. Including depreciation, I’m guessing you’ll likely get a tax loss of about 16-18K per year, saving you up to about 6K in taxes. (Depreciation of a 275K condo would equate to 10K per year in depreciation loss for tax purposes).

If your loan were a fixed rate loan and you were negative $500 per month as a rental I would recommend keeping the property at this point. The problem is that you do not know what your payments will be in 2010. You need to know this and project out what it would likely be.

The worst thing to do in my opinion would be to keep it for now, then unload it in 2010 when your payment resets and you can’t afford the escalated payment at a point when the market is near its lows another 10 or 15 % below today’s value.

[(former)FormerSanDiegan]

2008 – OK. Since you have good credit and increasing income you have to weigh the potential future prospect of losses and carrying costs versus the guaranteed loss of selling now in the weakest market in over a decade.

Your property is already down 25%. What’s the opportunity cost of spending the 70K to unload the property versus spreading that out via negative income over the next decade ?
Assuming you make less than 150K, you’ll get a decent tax break on the rental loss. Including depreciation, I’m guessing you’ll likely get a tax loss of about 16-18K per year, saving you up to about 6K in taxes. (Depreciation of a 275K condo would equate to 10K per year in depreciation loss for tax purposes).

If your loan were a fixed rate loan and you were negative $500 per month as a rental I would recommend keeping the property at this point. The problem is that you do not know what your payments will be in 2010. You need to know this and project out what it would likely be.

The worst thing to do in my opinion would be to keep it for now, then unload it in 2010 when your payment resets and you can’t afford the escalated payment at a point when the market is near its lows another 10 or 15 % below today’s value.

[(former)FormerSanDiegan]

2008 – OK. Since you have good credit and increasing income you have to weigh the potential future prospect of losses and carrying costs versus the guaranteed loss of selling now in the weakest market in over a decade.

Your property is already down 25%. What’s the opportunity cost of spending the 70K to unload the property versus spreading that out via negative income over the next decade ?
Assuming you make less than 150K, you’ll get a decent tax break on the rental loss. Including depreciation, I’m guessing you’ll likely get a tax loss of about 16-18K per year, saving you up to about 6K in taxes. (Depreciation of a 275K condo would equate to 10K per year in depreciation loss for tax purposes).

If your loan were a fixed rate loan and you were negative $500 per month as a rental I would recommend keeping the property at this point. The problem is that you do not know what your payments will be in 2010. You need to know this and project out what it would likely be.

The worst thing to do in my opinion would be to keep it for now, then unload it in 2010 when your payment resets and you can’t afford the escalated payment at a point when the market is near its lows another 10 or 15 % below today’s value.

[Raybyrnes]

CMRJoe
If you want to find the right buyer I would contact a few of the people at the san diego Housing Commission. They ahve a lot of first time homebuyers who sometime make too much money to qualify for Moderate income Housing. Your unit with the CHFA loan would present a good alternative. They could be a gret source of referrals. I would geta few names and write them a letter. That, or stop by and let them know what you are looking to do. Again, this is win win. They are not realators they are city employees looking to help families. Your CHFA loan is designed to help families. Work together and all could make out. If this advice works out make a donation to a charitable organization. It will bring good karma.

[Raybyrnes]

CMRJoe
If you want to find the right buyer I would contact a few of the people at the san diego Housing Commission. They ahve a lot of first time homebuyers who sometime make too much money to qualify for Moderate income Housing. Your unit with the CHFA loan would present a good alternative. They could be a gret source of referrals. I would geta few names and write them a letter. That, or stop by and let them know what you are looking to do. Again, this is win win. They are not realators they are city employees looking to help families. Your CHFA loan is designed to help families. Work together and all could make out. If this advice works out make a donation to a charitable organization. It will bring good karma.

[Raybyrnes]

CMRJoe
If you want to find the right buyer I would contact a few of the people at the san diego Housing Commission. They ahve a lot of first time homebuyers who sometime make too much money to qualify for Moderate income Housing. Your unit with the CHFA loan would present a good alternative. They could be a gret source of referrals. I would geta few names and write them a letter. That, or stop by and let them know what you are looking to do. Again, this is win win. They are not realators they are city employees looking to help families. Your CHFA loan is designed to help families. Work together and all could make out. If this advice works out make a donation to a charitable organization. It will bring good karma.

[2008]

Thanks FormerSanDiegan.

If my rate resets 2 points in 2010, which I believe is the maximum reset on my 80% loan, and my payments creap up another 500-600/month, with the write-off on negative income and depreciation, it sounds like I’m better off if I just hold on till at least 2012- versus selling today and realizing an immediate 70K loss.

Not sure what the tax savings would be, but I would lose 6K the next 3 years per year and 12K the 2 thereafter totaling 42K loss in rental income. Even without the tax write-off, still ahead vs taking a 70K loss right now.

Does my logic sound about right?

[2008]

Thanks FormerSanDiegan.

If my rate resets 2 points in 2010, which I believe is the maximum reset on my 80% loan, and my payments creap up another 500-600/month, with the write-off on negative income and depreciation, it sounds like I’m better off if I just hold on till at least 2012- versus selling today and realizing an immediate 70K loss.

Not sure what the tax savings would be, but I would lose 6K the next 3 years per year and 12K the 2 thereafter totaling 42K loss in rental income. Even without the tax write-off, still ahead vs taking a 70K loss right now.

Does my logic sound about right?

[2008]

Thanks FormerSanDiegan.

If my rate resets 2 points in 2010, which I believe is the maximum reset on my 80% loan, and my payments creap up another 500-600/month, with the write-off on negative income and depreciation, it sounds like I’m better off if I just hold on till at least 2012- versus selling today and realizing an immediate 70K loss.

Not sure what the tax savings would be, but I would lose 6K the next 3 years per year and 12K the 2 thereafter totaling 42K loss in rental income. Even without the tax write-off, still ahead vs taking a 70K loss right now.

Does my logic sound about right?

[unbiasedobserver]

CMRJoe, you said you thought 275K was a good deal for a 1BR condo. As I would like to try to understand what was going on in people’s minds a few years ago, please clarify:

Did you think 275K was a good deal because that’s what 1BR condos are worth, or did you think 275K was a good deal because you would be selling it for 400K in 2 years?

I sold a 1BR condo in the early 90’s for 29K. That plus some inflation is about what a 1BR condo is worth.

[unbiasedobserver]

CMRJoe, you said you thought 275K was a good deal for a 1BR condo. As I would like to try to understand what was going on in people’s minds a few years ago, please clarify:

Did you think 275K was a good deal because that’s what 1BR condos are worth, or did you think 275K was a good deal because you would be selling it for 400K in 2 years?

I sold a 1BR condo in the early 90’s for 29K. That plus some inflation is about what a 1BR condo is worth.

[Author]

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