Updated almost 17 years ago on . Most recent reply
Financial Preparedness
We want to begin investing in real-estate and prepare myself financially to move in this direction.
Question ~ we took out a line of credit to make some improvements to our home about 9 months ago. We live in an upper scale neighborhood and believed we needed to make some upgrades to make it marketable. We spent about $55K. Our home has not sold and we may simply yell "uncle" and stay in the home. If the home had sold, we have plenty of equity in the home and would have simply paid off the loan. We're making interest only payments ~ and the interest is tied to prime (currently I think we're paying about 5% or so). Also, we have a small mortgage note that is earning 12% interest. The remaining principle is close to what we owe on the line of credit. Should we get rid of the note and use it to pay off the line of credit? Or, given the respectable interest rate we’re earning ~ should we keep the note and use part of the interest income to service the debt on the line of credit? We plan to began buying SFH's for rentals. It is not obvious to me what kinds of things we will run into as we began the process of trying to get financing for investments ~ and what would be the best move financially.
Advice or thoughts ?