Updated over 8 years ago on . Most recent reply
Underwater rental property
Hello BP,
I have had a rental property for the past 5 years. The property value is underwater due to the second mortgage on the property. I purchased the property as a primary back in 2008 with a 80/20 mortgage. I have refinanced the 1st mortgage but the secondary lender will not let go. With the refi of the first loan, I am almost breaking even with my rent income. I want to build a buy and hold portfolio and my thinking is I can start with this property. But I am not so sure now. If I could get rid of the 2nd mortgage, I will for sure break even or possible cash flow. Are there any creative ways to deal with this second mortgage without doing a short sale or foreclosure? Should I do a short sale and start over?
Most Popular Reply
That is a tough question...
I bought all my rentals knowing that I would be losing money after the purchase... but I held out and got significant payback 10 years later...:
If you were not ready for the monthly negative cash flow, why did you buy in the first place ?