FB turned landlord

[Tavo]

Deal Hunter,

Not necessarily in a “distressed” situation, just a stupid (cash flow negative) one by my own making. Thanks for the post….

Sdnerd,

Thanks for the well thought out response and for reading my previous posts. I agree 100% with your recommendations and conclusions. These were my original conclusions, but it was nice to read other people’s thoughts. I guess, at this point, I need to ride this out a little longer until my options become clearer…

[djc]

Sell the house, move back into the condo.

If your estimates are accurate, you can at minimum break even and lose the house and it’s potential to turn into a disaster when the ARM resets or it falls 10,20,40k below your purchase price. One scenario is likely, the other one is definite.

It isn’t what you want to hear, but it is reality if you don’t want to end up with bad credit or worse, bankruptcy.

Just because you can afford it doesn’t mean you should wait and see what happens. 1k in the bank is another 1k towards retirement or the kid’s college fund.

That’s my opinion. Good luck.

[djc]

Sell the house, move back into the condo.

If your estimates are accurate, you can at minimum break even and lose the house and it’s potential to turn into a disaster when the ARM resets or it falls 10,20,40k below your purchase price. One scenario is likely, the other one is definite.

It isn’t what you want to hear, but it is reality if you don’t want to end up with bad credit or worse, bankruptcy.

Just because you can afford it doesn’t mean you should wait and see what happens. 1k in the bank is another 1k towards retirement or the kid’s college fund.

That’s my opinion. Good luck.

[djc]

Sell the house, move back into the condo.

If your estimates are accurate, you can at minimum break even and lose the house and it’s potential to turn into a disaster when the ARM resets or it falls 10,20,40k below your purchase price. One scenario is likely, the other one is definite.

It isn’t what you want to hear, but it is reality if you don’t want to end up with bad credit or worse, bankruptcy.

Just because you can afford it doesn’t mean you should wait and see what happens. 1k in the bank is another 1k towards retirement or the kid’s college fund.

That’s my opinion. Good luck.

[djc]

Sell the house, move back into the condo.

If your estimates are accurate, you can at minimum break even and lose the house and it’s potential to turn into a disaster when the ARM resets or it falls 10,20,40k below your purchase price. One scenario is likely, the other one is definite.

It isn’t what you want to hear, but it is reality if you don’t want to end up with bad credit or worse, bankruptcy.

Just because you can afford it doesn’t mean you should wait and see what happens. 1k in the bank is another 1k towards retirement or the kid’s college fund.

That’s my opinion. Good luck.

[djc]

Sell the house, move back into the condo.

If your estimates are accurate, you can at minimum break even and lose the house and it’s potential to turn into a disaster when the ARM resets or it falls 10,20,40k below your purchase price. One scenario is likely, the other one is definite.

It isn’t what you want to hear, but it is reality if you don’t want to end up with bad credit or worse, bankruptcy.

Just because you can afford it doesn’t mean you should wait and see what happens. 1k in the bank is another 1k towards retirement or the kid’s college fund.

That’s my opinion. Good luck.

[Bugs]

The ARM on your primary residence could end up being a killer if/when the interest rates max out.

Some lenders are talking about resetting mortgages. If you can talk the mortgage holder on the condo to reset it closer to your break even point on the rental that might work.

As for how long you’ll have to hold both properties to “break even” I’m thinking it could easily be 10 years and it might be longer than that. Most people assume the next cycle will peak higher than this last one did, but there’s no real reason why it has to. I can envision a scenario where the next cycle only restores 1/4 of the losses from this current downswing. And who knows what’s going to happen with interest rates?

On the other hand, inflation and its variants are coming to town for an extended visit. That could translate into higher incomes, and if so it’s theoretically possible that we might wage-inflate our way into the prior sales prices. When considering we now compete in a more globalized economy I don’t see how. How good do you think the chances are of your income tripling over the next 10 years?

The most brazen move is to hang on to both assets, wait for the market to drop, buy another home at the bottom and then walk on both your current loans. That will put your mortgage payment at parity with the rental rates and all you will have lost will be the additional payments you’ve made between now and then. That is, depending on how the recourse/non-recourse thing works out.

[Bugs]

The ARM on your primary residence could end up being a killer if/when the interest rates max out.

Some lenders are talking about resetting mortgages. If you can talk the mortgage holder on the condo to reset it closer to your break even point on the rental that might work.

As for how long you’ll have to hold both properties to “break even” I’m thinking it could easily be 10 years and it might be longer than that. Most people assume the next cycle will peak higher than this last one did, but there’s no real reason why it has to. I can envision a scenario where the next cycle only restores 1/4 of the losses from this current downswing. And who knows what’s going to happen with interest rates?

On the other hand, inflation and its variants are coming to town for an extended visit. That could translate into higher incomes, and if so it’s theoretically possible that we might wage-inflate our way into the prior sales prices. When considering we now compete in a more globalized economy I don’t see how. How good do you think the chances are of your income tripling over the next 10 years?

The most brazen move is to hang on to both assets, wait for the market to drop, buy another home at the bottom and then walk on both your current loans. That will put your mortgage payment at parity with the rental rates and all you will have lost will be the additional payments you’ve made between now and then. That is, depending on how the recourse/non-recourse thing works out.

[Bugs]

The ARM on your primary residence could end up being a killer if/when the interest rates max out.

Some lenders are talking about resetting mortgages. If you can talk the mortgage holder on the condo to reset it closer to your break even point on the rental that might work.

As for how long you’ll have to hold both properties to “break even” I’m thinking it could easily be 10 years and it might be longer than that. Most people assume the next cycle will peak higher than this last one did, but there’s no real reason why it has to. I can envision a scenario where the next cycle only restores 1/4 of the losses from this current downswing. And who knows what’s going to happen with interest rates?

On the other hand, inflation and its variants are coming to town for an extended visit. That could translate into higher incomes, and if so it’s theoretically possible that we might wage-inflate our way into the prior sales prices. When considering we now compete in a more globalized economy I don’t see how. How good do you think the chances are of your income tripling over the next 10 years?

The most brazen move is to hang on to both assets, wait for the market to drop, buy another home at the bottom and then walk on both your current loans. That will put your mortgage payment at parity with the rental rates and all you will have lost will be the additional payments you’ve made between now and then. That is, depending on how the recourse/non-recourse thing works out.

[Bugs]

The ARM on your primary residence could end up being a killer if/when the interest rates max out.

Some lenders are talking about resetting mortgages. If you can talk the mortgage holder on the condo to reset it closer to your break even point on the rental that might work.

As for how long you’ll have to hold both properties to “break even” I’m thinking it could easily be 10 years and it might be longer than that. Most people assume the next cycle will peak higher than this last one did, but there’s no real reason why it has to. I can envision a scenario where the next cycle only restores 1/4 of the losses from this current downswing. And who knows what’s going to happen with interest rates?

On the other hand, inflation and its variants are coming to town for an extended visit. That could translate into higher incomes, and if so it’s theoretically possible that we might wage-inflate our way into the prior sales prices. When considering we now compete in a more globalized economy I don’t see how. How good do you think the chances are of your income tripling over the next 10 years?

The most brazen move is to hang on to both assets, wait for the market to drop, buy another home at the bottom and then walk on both your current loans. That will put your mortgage payment at parity with the rental rates and all you will have lost will be the additional payments you’ve made between now and then. That is, depending on how the recourse/non-recourse thing works out.

[Bugs]

The ARM on your primary residence could end up being a killer if/when the interest rates max out.

Some lenders are talking about resetting mortgages. If you can talk the mortgage holder on the condo to reset it closer to your break even point on the rental that might work.

As for how long you’ll have to hold both properties to “break even” I’m thinking it could easily be 10 years and it might be longer than that. Most people assume the next cycle will peak higher than this last one did, but there’s no real reason why it has to. I can envision a scenario where the next cycle only restores 1/4 of the losses from this current downswing. And who knows what’s going to happen with interest rates?

On the other hand, inflation and its variants are coming to town for an extended visit. That could translate into higher incomes, and if so it’s theoretically possible that we might wage-inflate our way into the prior sales prices. When considering we now compete in a more globalized economy I don’t see how. How good do you think the chances are of your income tripling over the next 10 years?

The most brazen move is to hang on to both assets, wait for the market to drop, buy another home at the bottom and then walk on both your current loans. That will put your mortgage payment at parity with the rental rates and all you will have lost will be the additional payments you’ve made between now and then. That is, depending on how the recourse/non-recourse thing works out.

[Running Bear]

DJC gave you very good advice.

I would try and sell the house since it sounds like you can get out of it for little to no loss. But if you choose to do this it better be fast. This spring selling pop won’t last very long. IMHO

Rent until the lease is up on the tenants in the condo then move back into the condo. You are bleeding money every month holding on to both and also have double exposure to the price depreciation in the market.

Also, the condo is on a 30 year fixed more then likely recourse loan and underwater. You can’t get away from this money drain so get rid of what you can….the house.

You have to make the choice that is going to be better for your financial future. If you can take the emotion out of it I think you will come to realize that moving back into the condo is the best course financially by far.

My2Cents

[Running Bear]

DJC gave you very good advice.

I would try and sell the house since it sounds like you can get out of it for little to no loss. But if you choose to do this it better be fast. This spring selling pop won’t last very long. IMHO

Rent until the lease is up on the tenants in the condo then move back into the condo. You are bleeding money every month holding on to both and also have double exposure to the price depreciation in the market.

Also, the condo is on a 30 year fixed more then likely recourse loan and underwater. You can’t get away from this money drain so get rid of what you can….the house.

You have to make the choice that is going to be better for your financial future. If you can take the emotion out of it I think you will come to realize that moving back into the condo is the best course financially by far.

My2Cents

[Running Bear]

DJC gave you very good advice.

I would try and sell the house since it sounds like you can get out of it for little to no loss. But if you choose to do this it better be fast. This spring selling pop won’t last very long. IMHO

Rent until the lease is up on the tenants in the condo then move back into the condo. You are bleeding money every month holding on to both and also have double exposure to the price depreciation in the market.

Also, the condo is on a 30 year fixed more then likely recourse loan and underwater. You can’t get away from this money drain so get rid of what you can….the house.

You have to make the choice that is going to be better for your financial future. If you can take the emotion out of it I think you will come to realize that moving back into the condo is the best course financially by far.

My2Cents

[Running Bear]

DJC gave you very good advice.

I would try and sell the house since it sounds like you can get out of it for little to no loss. But if you choose to do this it better be fast. This spring selling pop won’t last very long. IMHO

Rent until the lease is up on the tenants in the condo then move back into the condo. You are bleeding money every month holding on to both and also have double exposure to the price depreciation in the market.

Also, the condo is on a 30 year fixed more then likely recourse loan and underwater. You can’t get away from this money drain so get rid of what you can….the house.

You have to make the choice that is going to be better for your financial future. If you can take the emotion out of it I think you will come to realize that moving back into the condo is the best course financially by far.

My2Cents

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