All Forum Posts by: Pete Davey

Thanks Carlos. Thing is, we need to stay in OC for family obligations, so finding a duplex isn't super cheap... Then again, you're from OC so you would know better than I. Would be great to house hack somehow. 

We would positive cash flow if we rented this place out, or air bnb, since we're kind of close to D-land (I'm guessing here...) 

Thanks! And what if I did a HELOC instead?

I've been looking around, if I buy in let's say Long Beach, I can find a great 2+1 condo for $239k, but he wants 25% down which is $59k.. if I did that, then after all fees I'd still cash flow positive but then I'd have 59k tied up in it. 

I forgot one other thing - we have outgrown the place. We now have kids... this is why we want to rent it out and go rent a larger home (buying a larger home here in OC is cost prohibitive at the moment...)

The risk is that we'll need to move out into a rental and then expect this "hot rental market" gets us a tenant really fast. 

So - if I owe 289k and it appraises for 387k (I only know this because we just had it appraised for the sale), with closing costs and such, what sort of cash does that leave us with?

Hi - I am in a situation and want to ask "what would you do.."?

I own a 2+2 Townhome in Orange County, CA. 

I owe - $289k.

I listed it for sale, and got a ton of interest, picked a buyer, and started escrow. $5k was put in as earnest deposit. Contingencies dropped, almost closed, and we just heard they are backing out due to breaking up their marriage and cannot afford it solo. I have a clause in the contract that they will forfeit their earnest deposit.

It was listed at 399k, and sold for 404k. I have backup buyers... 

This was my first time buying and first time selling. I bought it in 2007 right before the major decline and never thought I'd get out of here. 

The bank appraisal came in at $387k, conservative...

The plan was to sell high, and rent and wait the market out. Who knows what will happen. Maybe interest will go up and it will get even worse. The story here is that inventory is low, so prices are pushed up.

I'm very happy that we didn't get a rental or sign a lease, but we were very close!! Renting would have been much more expensive than our current situation, even with high HOA, but we just wanted to get out as we are scared the market might dip again.

Maybe this is a blessing in disguise?

I really want to own more properties and rent, dip my toes into self managing (instead of hiring a PM) - I have the personality and temperament, and I know how to repair things.

Now that this has happened, I'm thinking - maybe we rent this place out instead (now that we REALLY know the rental market from doing a ton of viewings here in OC, wow it's high...) go rent somewhere else, and do either a refinance (would give us cash, but would raise our mortgage as interest won't be much or any better by about $300/mo not to mention closing costs) or a HELOC and use that money towards another rental and just start to build my portfolio?

I've never done a refi or heloc, so uncertain how much I should take out, and what I should do with it. Let's say I refi for 387k, do I then need to pay PMI since I won't have any equity in the home anymore? Or do they not allow 100% refi's?

I've been looking and can find smaller 2+1 or 2+2 condos for 260k or so here in OC and rent them for $1700-$2000 which would cover PITI, taxes and HOA. I'm apprehensive on buying far away for cheaper and using a PM company - or is that just dumb and should I go for it? Or should I just find another person here on BP in the same boat and go in with them? Apprehensive to rub pennies with a stranger at the moment...

Well - what would you do in this situation?

@Carlos Altamirano Thanks! I suppose my question was more on the logistics side of things. I suppose you would need a property manager to handle tenant issues. It wouldn't be feasible to have to constantly travel out there to "keep an eye" on the property and such, deal with the day to day things. 

Hi @Carlos Altamirano, I see you live in the OC (Like me) but bought a building in IN. I have not started in RE yet, but it just seems unfathomable doing it locally as property is way too expensive here. How difficult was it to purchase out of state like that (finding the property, etc.) Did you have a vested interest in that particular area, travel out there and handle it locally? Just curious on the logistics and such.