stumbled into my current situation - Posted by Bryan

Posted by Clint on June 09, 2006 at 06:55:14:

Third paragraph, first sentence, read his thread again. He appears to luck out on the wave of appreciation, just my .02,

Thanks Joe!


stumbled into my current situation - Posted by Bryan

Posted by Bryan on June 08, 2006 at 14:58:44:

Ok, so over the past 12 months my wife an I have talked about some RE investing. We have discussed mostly landlording. I’m not sure that’s the way I want to go, but I’m open. Niether one of us really know much about it, except from hear say, and this website. I would like to describe my current position, and take any suggestions.

We didnt really mean to turn a profit on this house…it just sort of happened :slight_smile:

We purchased our current residence, a 4bd 21/2 bath in north Reno 2 years ago for 262k on an interest only loan…it is our first experience purchasing a house, and we got snowballed by our realtor, and the bank, live and learn… Now we have a realtor that we trust, and we have been working with him for the past year to determine the best time to sell, as we would like to move into town. The retail value of the property is approx 341k (which obviously makes me pretty happy).

My question is…what next. We have thought about putting that money down on our next house to lower the payments, but it seems as though it may be more profitable somewhere else. We thought about renting the house, which would bring us around 1700/mo, which would just barely cover our payment, so that doesn’t seem like it would make much sense. After reading some of these posts, I am considering leasing with options, as many people around here can’t obtain financing.

any comments, suggestions…

Thanks in advance.

Re: stumbled into my current situation - Posted by Chris in FL

Posted by Chris in FL on June 10, 2006 at 22:52:05:

You said interest only loan; I assume, same as Clint, that means adjustable rate (as most interest only loans are adjustable, though not necessarily all). I agree this is probably not a good time to sit on adjustable rate loans; I locked up all of mine quite some time ago. Also, Clint has a valid point, if you have owned and lived in current home more than two years (out of last five) you can sell it with no tax on the profits. Helps make selling painless, and you sounded as if you wanted to sell anyhow.
Moving forward from there, advice is hard to give. There are a ton of ways to invest in real estate, and what makes sense for you depends on what, specifically, you want to accomplish. Cashflow asap warrants different approach than long term wealth building. Tolerance for risk matters, as does amount of time and energy you want to put into it. Are you looking for a business, or just some passive investments that can provide for a comfortable retirement? Give more details, and responders can give better advice. Best wishes!

Re: stumbled into my current situation - Posted by Clint

Posted by Clint on June 08, 2006 at 19:53:21:

You’ve rode the wave of appreciation, now get out of the water, you are on an interest only loan, it’s going to go up and you are not currently putting any money into your principle.

Sell and profit now (especially if its been two years) that would be tax free cash; take the money and put it down on another house, when you do, open up an equity line equal to the amount you put into your house. This will give you leverage to go buy other props.

best of luck, and jump ship now…


Re: stumbled into my current situation - Posted by trish

Posted by trish on June 08, 2006 at 15:10:05:

You are looking to get out of this house and into another correct? If you are wanting to get into real estate you may want to get out of that house completely. you take some of that profit and put on another home to live in; take some of it and put aside for oops factor on new endeavors(you will need it), take the rest and start looking into doing deals. you can set up so many deals with little or no money that you don’t have to worry about this house. this is you opportunity to get a start at cash to work your deals. more that are just starting out have to do a couple of deals the hard way to get a cash reserve. you seem to have one. There are a couple ways to go on this.
You can do a home equity loan if possible and then lease option it. this gives you cash up front and then you can still get into real estate. wait for more advice before you act and start reading the articles on this website for info. there is a lot of info to be seen here. good luck

Re: stumbled into my current situation - Posted by Joe Kaiser

Posted by Joe Kaiser on June 09, 2006 at 24:11:37:

How do you know it’s not a fixed rate loan?

Why would you ever want to put money “into your principle?”

And why jump ship now to go buy something else?

Not trying to be critical, just wondering what you’re thinking.