Should I Stay or Should I Go?

[Jordan Lilley]

I own a house in the Charlotte NC area. Details here:

Value: $215-220k

Owed: $110K At 4.375% interest

Repairs and upgrades already done: $13K

Repairs to be done if renting: $12K

If I sell the house now, I’d end up with $85-90K cash, move in to my parent’s house until I find a larger home to buy for myself. I’d not put the full amount into the new house because I’d like to purchase a rental as well.


Would it make more sense to stay in this house, 50K cash out refinance it, do the $12K of additional repairs and then rent it out when I find something else to buy?  Or sell now, pay off the 25k student loan debt I have and be debt free, and find a couple of properties in 6 months or so when the foreclosures start to come in from Covid.

thanks

Jordan

[Jody Sperling]

Why step backwards to move forwards? You own a house now. Use it as a rental. Contact someone in your area who rents regularly. Verify that the 12k you think you need to spend, you really need to spend.

I way overestimated what I needed to do to get my first rental move-in ready.

Also, why so fast to use a cash out refinance? You could consider a HELOC instead, keep your equity in the current house, making it cashflow much better, and allowing you to have a better debt to income ratio.

Use the HELOC to buy a primary instead.