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Dmitry Kisselev
  • Monterey, CA
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San Jose to Rent or Sell / Monterey to Buy or Rent

Dmitry Kisselev
  • Monterey, CA
Posted Nov 10 2017, 12:29

I'm a newbie looking for seasoned RE advise. I faced a situation that will require our family to live in Monterey. I been learning about RE on the sidelines for some time and felt that this might be an opportunity which pushes us to actively participate.

We own a condo in San Jose / Good Samaritan Hospital Area (95124). The condo appreciated from our initial purchase in '07 over 30% and has over $150K equity built in now. The same condo will rent out at ~$2.5K a month, which will produce a negative cash flow. That said with a negative cash flow it will be still much less (30%) of our actual today expenses of paying for it monthly (PITI+HOA).

Life happened and we need to spend next 2-3 years in Monterey. At first, I thought to rent San Jose condo out and buy sfr/duplex/triplex in Monterey and live hack by renting a portion of it out. It seems that If I buy a property there using HELOC from SJ property as downpayment we will likely cashflow negative in Monterey as well. Yet putting two negative cashflows together we likely be less out of pocket then the expense of paying monthly for property in SJ. In this scenario, both properties appreciate and potentially bring tax benefits of write-offs.

The alternative to that would be to just rent out SJ and rent in Monterey, but that seems to be more expensive rent+negative cashflow from the rental in SJ and no appreciation in Monterey.

Am I missing something? Do my eyes are covered in the veil of ignorance? How would you deal with this situation? Please speak up. Any suggestions are appreciated.

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