Rent my house or sell it for money

39 Replies

Hello

all, I am looking at the Idea of selling our primary residence and buying our first investment property . we bought our house 4/2 2 years ago for $179,000 the house is 3 blocks from a (local university)

We owned $173000 and pay for it monthly $1379 with everything included.

similar houses are selling for $220,000 to $280,000 rent in the area for the same or close to sqf and beds and baths is about $2200-$2500 .

Should we?

Sell now, and use cash to investing?

Live in it for another year, and get more money?

We would Love to get others opinions on this situation We are just trying to find out how to finance our dream! 

Yes, I understand.  I invest out of my area.  I live in CA and invest in Ohio and Texas. 
PM me if you want to know more about it but I hope everything works out well!

I think you are on the right track. Funny but I was actually in the same position as you 6 months ago. For my personal residence, I owed $171K and the appraised value was $275k. I wanted to have the equity in cash so I could invest in more properties.

What I did was refinance my property and cashed out $50k out of my current residence. The increase in mortgage was about $300 a month.

With the cash, I purchased one property for $9,000 cash in a depressed market in Ohio and now earn $350 a month from the rents.

I then used the rest of the money and invested in a rental property in Houston. This property will net me almost $800 cash flow each month.

So, I refinanced my house with cash out and bought two properties with it. Now I have $1,150 coming in each month from the $300 increase in mortgage.

I am very glad I did it.

@Johanna S. if you decide to keep your home as a rental property, do you have enough capital to purchase a new home? You did not mention, if you have children. An option would be to sell your home and use the cash, to purchase a residential property. You can use FHA Financing requiring a 3-5% down payment and you will receive residential loan terms that includes a 30 year amortization schedule. The plus side is you will receive management and landording experience while your tenants pay the mortgage. The FHA will require you to live there a minimum of one year before you can move out and lease the unit. The downside is such a purchasing scenario does not provide you asset protection, with respect to closing on an Investment Property in the name of a LLC. This is one option to consider without knowing the full details, of your personal situation. I hope this helps you.

Originally posted by @Thomas Franklin :

@Johanna Serna if you decide to keep your home as a rental property, do you have enough capital to purchase a new home? You did not mention, if you have children. An option would be to sell your home and use the cash, to purchase a residential property. You can use FHA Financing requiring a 3-5% down payment and you will receive residential loan terms that includes a 30 year amortization schedule. The plus side is you will receive management and landording experience while your tenants pay the mortgage. The FHA will require you to live there a minimum of one year before you can move out and lease the unit. The downside is such a purchasing scenario does not provide you asset protection, with respect to closing on an Investment Property in the name of a LLC. This is one option to consider without knowing the full details, of your personal situation. I hope this helps you.

@Thomas Franklin

We have 1 child and we dont have money for now ☹ our loan is a fha .

we are paying our credit cards for improve our credit score now with 695 the thing is that i have a little problem with my income... My boss only report 20% of what i make so we have to start working on it too.

Thanks a lot for your information! 

Everyone has a different opinions. My husband and I got started in buy and holds through personals. We would live in our house and when we were transferred we would rent it out and buy another one. It was a cheap way to get started. 

Now all of our houses have equity thanks to buying in the low of the recession. While we will sell at some point, our deciding factor is can the profit that we make do more than our current cash flow. So far the answer has always been no.

We did recently a cash out refinance. That went a long way to helping us get equity out while not having to sell the house. So we were able to buy one more house and have enough for 1/2 of the next house.

@Johanna S. Looks like you would get about 50K max from a cashout refin / HELOC. Given that your financing situation looks tricky a refinance is probably not the way to go. Perhaps you could sell and get into a duplex or multi-family as owner occupied to lower your housing expenses.

@Johanna S. Thank you, for expanding your personal details. You can sell your home, pay off your existing mortgage, and use the avails, to purchase a Duplrx, Tri Plex, or Quad. Because four units and less qualify, for residential financing, you can use a FHA Loan to acquire the Multifamily Property. As I stated before, you and your family can live in one of the units and the rental income paid, by the other tenants, will pay the monthly mortgage and other property expenses, provide you additional income, and help you pay down your credit card debt. To use FHA Financing, on four units or less, requires the owner to reside, at the property, for a minimum of one year as their primary residence.

Originally posted by Account Closed:

@Johanna Serna Looks like you would get about 50K max from a cashout refin / HELOC. Given that your financing situation looks tricky a refinance is probably not the way to go. Perhaps you could sell and get into a duplex or multi-family as owner occupied to lower your housing expenses.

 @noeperrin

Thanks!!

Originally posted by Account Closed:

@Johanna Serna Looks like you would get about 50K max from a cashout refin / HELOC. Given that your financing situation looks tricky a refinance is probably not the way to go. Perhaps you could sell and get into a duplex or multi-family as owner occupied to lower your housing expenses.

@noeperrin

If we sell our house and move to a multifamily what will be the next step? Stay 1 year and then move or rent? After one year i will be in the same situacion? Or? I dont understand could you please explain a little more.

If i get heloc for $50k that is not bad for a downpayment ?

Can we keep our house as a rental still? If we save the money for down payment 20% ?

Originally posted by @Thomas Franklin :

@Johanna Serna Thank you, for expanding your personal details. You can sell your home, pay off your existing mortgage, and use the avails, to purchase a Duplrx, Tri Plex, or Quad. Because four units and less qualify, for residential financing, you can use a FHA Loan to acquire the Multifamily Property. As I stated before, you and your family can live in one of the units and the rental income paid, by the other tenants, will pay the monthly mortgage and other property expenses, provide you additional income, and help you pay down your credit card debt. To use FHA Financing, on four units or less, requires the owner to reside, at the property, for a minimum of one year as their primary residence.

@thomasfranklin

If i do that? What will be the next step after 1 year of owner occupied?

Thanks!

Not sure how nice your home is but I would not expect a tenant to take care of your home as well as you did.  Your house has a certain market value right now and after 1 or 2 years of being a rental what might it be worth.  Just something to consider.