House under contract... options....

[Alan Hicks]

My background:

1. Own my primary house in 30043. Purchased for $219k last year. Valued at $285k due to increase in value (mostly because I finished the 1000 sqft basement). No plans to sell.

2. Own a rental property 1 hour away in 30527. Owned for 13 years. Balance = 70k . Rent = Mortgage - so I break even. No profit. Same renter for 8 years. Have around 50k in equity.

3. Just put an offer on a 3/1 in 30019. Cute, 1950's, all hardwood floors, .60 acre, no HOA, 1 mile from downtown with restaurants, shopping, banks, etc. Perfect location to downtown and to the main highway. Also, only 15 mins from my primary house - which is good. My offer of $125k was accepted this morning. Next step is getting it inspected and appraised. I have 10 days.

I have 2 options:

1. Renovate and rent for $1100 per month. This area has exploded with growth. This would have some cash flow after paying mortgage/taxes/etc.

2. Sell the House #2 and the renter moves into House #3. Since the renter is on a fixed income (retiree), the rent would not increase. This means no cash flow, but $50k in cash from the sale.

Thoughts ?