$35K equity

[Will R.]

New to investing. I purchased my first townhome in 2009. I owe $70k and zillow has it valued at 105-110K. Currently rented and I pay $80 out of pocket each month. i would like to keep the property long term. i also co-signed on another property with my sister that my parents rent. profits from that will go to my sister and younger brother. We owe $80k on that property and zillow has it at $110-115k. Im getting ready to move to Nebraska and plan on using the wifes VA loan to purchase a home there. At the same time I would like to re-invest the equity from the first townhome to buy another rental. Is this a good/bad idea? Should I use it to finance the house in Nebraska? Maybe buy a fixer upper in Nebraska and use the equity for that? Also, thought about selling one to pay down the other ? What are your thoughts?

[Brenton Kasselder]

@Tyler Flagg yeah its called an HD Project Loan up to $40,000 loaned %7 interest and the payments don't start for 6 months. So you can finish the project, refi and not even pay a payment on the loan. Not %100 on this but I think its interest free for 6 months as well. Very easy. 

@Will R. Too flag someone in your post you need to use shift-2 and then start to type their name and their name should appear at the bottom of the reply box and click it. That will mention someone so they are informed you messaged them.

On the other note you really shouldn't consider keeping a negative cash flowing property. it doesn't just cost you a few dollars. You are just starting, therefore the time value of the lost cash flow being reinvested should be taken into consideration. At the kinds of ROI we can expect in REI, there is a lot of lost future gains. Unless you can make a VERY good case for appreciation, I wouldn't even consider holding onto it. 1031 exchange that place and stop buying negative cash flowing properties. Also you should run the property through the rental property calculator, if the property cash flows with full occupancy, (accoutning for vacancy and other expenses, that is a property worth considering) take your personal preferences into account as much or as little as you want. Nobody can tell what is more important, you'll probably have to make some compromises.