I would love to hear your thoughts on how to weigh my options. I bought a 3br 2ba home in NC (I lived there at the time) in 2014. I bought it for 163,000 it now would likely sell for 250,000. I had the same wonderful tenant the entire time. She just moved out. My interest rate is 4.5 payment $884.00 a month. Rent was 1250 but was very low for the area and home. If I keep it I will rent at 1500 per month. My credit was hit due to not realizing I had and electric bill to pay in my move. My credit score is 650. I'm doubtful that I can secure lending for another rental at this time due to my credit score. Now the home is 7 hours from where I'm currently living. Should I keep it and rent again while I'm improving my score? Then remortgage and use equity to pay a down payment on additional rentals where I'm currently living? Sell now, sell high keep my cash until I can buy where I'm currently living? Or some other option I haven't thought of??
I want to add I owe $110,000 on the house now
If it's anywhere near Raleigh, I'll assume your mortgage and we can be partners. JK. No, but really.
I'm no pro... but they say never sell real-estate and if you do, use it to by additional property. Good thing is you lived there, I'm assuming over a year? so you should be good tax wise. And you have great equity. So no matter what, I think you win.
I'd definitely shop around with lenders right now and see what's the best rate they can do on a refinance right now, or if they can at all. At least you'll know for sure.
If it were me I'd shop around and either 1. greatly reduce your monthly mortgage, increasing your cash flow (giving you room to dish out a 8-10% gross income management fee), or 2. (optimal choice) doing a cash out refinance and using that money toward another property in TN. That would be my game plan. If you cant refinance just yet, I think I'd still rent it out while you build credit back, even if you hire a management company and give up some cash flow. Then you'll be in a position to have three properties instead of looking for a second again.
Good luck! After all, it's a good problem to have whatever you decide.
And I am definitely no pro and would love to be in your shoes, but have been listening alot to Robert Kiyosaki, and he would say not to sell. LOL
Thank you for the advice, Greg & Sherree. I will talk with my mortgage broker and see what can be done.
Oh Greg, it’s in Denver, NC. Denver is about 25 minutes north of Charlotte. The big draw is small town living on Lake Norman.
Another option would be to use a hard money lender to continue buying properties. Also, another option, you can often hire people who can help get through a few items on your credit report and raise the score faster than normal. The location is good; I would be interested in buying in that area.
Thank you A Schwartz.