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Updated over 10 years ago on . Most recent reply

User Stats

90
Posts
41
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Michael Beinetti
  • Investor
  • Rochester, NY
41
Votes |
90
Posts

What should I do?

Michael Beinetti
  • Investor
  • Rochester, NY
Posted

I have a gorgeous duplex in a nice neighborhood in Rochester, NY.  It was the first house I ever bought (note: sentimental value) and it has been a great property to own.  

Some of the specs: Two family, Boston style. 1 bedroom downstairs rented at $800/month and upstairs with a 2/3 bedrooms rented at $915 (under-rented as the tenants have been there 6+ years and my rent hikes have been slow in coming). The house is in good condition with the only major improvement looming ahead is a new roof. I have around $40k in equity in the property (Market approx. $135k and loan bal. $95k) and 20 years left on an FHA mortgage. There are a variety of things I could do....but I'm not sure what is best. I'm curious what other people would do. Here are my ideas.

>Sell.  Hopefully for the full market value (minus noted pending roof repair) and cash out.

>Refi. Problem is the house will most likely appraise around $130k-$140k and the few lenders I've spoken to need a lower LTV for the investment refi's. Understandable. Not definitely an option right now.

>Keep it. Get the rent up where it needs to be. Get the roof done. Refi in a few years to a 15yr conventional and keep it rollin'.

If I cash out (option 1) I would like to turn around and reinvest in additional property.  So the thought isn't to bail on the investment, but to use it as a catalyst....the questions are for what and when.

Other options?  Any input is greatly appreciated.

Most Popular Reply

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22,059
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14,127
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Jon Holdman
  • Rental Property Investor
  • Mercer Island, WA
14,127
Votes |
22,059
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Jon Holdman
  • Rental Property Investor
  • Mercer Island, WA
ModeratorReplied

If you sell you will have $11-13K in selling costs.  Plus the roof.  So, you might net $20K or a little more.  That doesn't seem like a good plan unless you can use that to buy something new that's more profitable.  Have to be a really good deal to overcome the costs of the sale.

Refi seems impractical given the values.  I don't see you getting more than a few grand.  And why bother?  What's the rate on your existing loan?

Holding seems fine.  You're getting $1715 out of a property worth $135K.  That's a pretty good deal.

Well, there is NO room in an investors vocabulary for "sentimental value".  Forget such words.  Investments are a numbers decision.

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