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Updated about 9 years ago,
Negative Cash Flow Condo Puzzle (Denver)
Morning. This may be very straightforward, it may not be. Hence I'm asking the collective.
Current situation: I currently own a 2bed/2bath condo in Downtown Denver. Condo value is somewhere $580-600k, currently have outstanding debt on the property of ~$395k. Ownership costs including HOA are approximately $2,900/month. Rent is currently $2,400/month. Market rent may be closer to $2,600 but getting to just break even would be tough.
Goal: There are multiple condos south of Downtown Denver priced in the $275-300k range. I know these units can rent for $1500-1800. (My parents own and rent out a unit in the complex at the high end of this range). Goal is to sell the downtown unit and buy two of these units.
Getting Current to Goal: I would like to 1031, to get from A to B but I have some challenging financing stipulations that I think are going to complicate things a bit. I'm on the tail end of getting divorced. As a result, I am still on the mortgage for what was our primary residence in Southern CA muddying up my debt to income. She has made all the payments on that property since April of 2015. I have heard that if I can show 12 months or payments they may look past that obligation. Further, given my monthly student loan obligations and current salary (Took a 40% pay decrease to move back to Denver from LA) I think I would have real trouble qualifying for the two properties without including the expected rental income. Not sure how a traditional lender would look at that. Last complication is I have a renter in the current unit until May 31. I think he would be willing to work with me if I were to sell.
Just hoping to get some general advice on how to go about this, what I should look out for or any other creative ideas to get this done.
Thanks!
Scott