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Eman
2014 Dec 31, 6:16am
SF ace,
Given the options, cash in refi makes the most sense to me. I'm totally against the idea of selling. Even losing $200/month, that's $24k in 10 years. If history is any indication, there's a high probability the condo will worth $500k by then.
Although this investment is a dog, he can turn it around with a cash in refi. It's the cost of learning. The alternative is to find another positive cashflow investment to off set this dog. Given where we are in the cycle, finding another property that makes sense is not an easy task. Out of state investing is sure a loser even though the numbers look so rosy on paper.
SFace
2014 Dec 31, 6:38am
SF ace,
Given the options, cash in refi makes the most sense to me. I'm totally against the idea of selling. Even losing $200/month, that's $24k in 10 years. If history is any indication, there's a high probability the condo will worth $500k by then.
Although this investment is a dog, he can turn it around with a cash in refi. It's the cost of learning. The alternative is to find another positive cashflow investment to off set this dog. Given where we are in the cycle, finding another property that makes sense is not an easy task. Out of state investing is sure a loser even though the numbers look so rosy on paper.
yep, the mistake was made buying at the seventh year of a bull run, at 6.75% fixed rate. Two awful choices.
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Hi guys,
In 2007 I bought a condo in the Berkeley/Oakland Hills for $405,000 (20% down, 30yr fixed, 6.75% APR, $330 monthly HOA).
In 2010 I refinanced down to 5.25% under the HARP Program and in 2013 I moved away and rented it out.
Monthly rental income is $2,000
Monthly mortage is $1800
Monthly HOA went up to $400
As you can see, I'm going about $200 out of pocket on the place each month (i'm ignoring property tax since it is roughly offset by the tax break in interest payment). Rental prices are steadily rising however.
I'm currently showing about 85-90% loan to value ratio so I can't refinance again to take advantage of the low rates unfortunately.
My options are to keep things as is or to sell for $330,000 (owe $295,000 on the loan).
Obviously if you look at the snap-shot just today, it doesn't make sense to hold onto it since I'm going out of pocket each month. But eventually I will be in the green in time.
For the experts, what would you do?
Thanks,
Luke