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Updated 5 days ago on . Most recent reply

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Stephen Fleming
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What would you do?

Stephen Fleming
Posted

Should I do HEL and rent out house? Or should I just sell?

My home is appraised for 242,000 and I owe 122,000. My rate is at 2.875%

option one is to get a HEL for $60,000, use that as a down payment for a new personal home, and rent out my current home. 

Current mortgage is $1,000

HEL would be roughly $600

Would hope to get $2,000 - $2,400 for my home for rent 

That gives me $400-$800 profit 

Or I could just sell my house for a profit and use some of that for a new down payment and have some money left over 

Most Popular Reply

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James Hamling
#5 All Forums Contributor
  • Real Estate Broker
  • Minneapolis, MN
5,667
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James Hamling
#5 All Forums Contributor
  • Real Estate Broker
  • Minneapolis, MN
Replied
Quote from @Stephen Fleming:

Should I do HEL and rent out house? Or should I just sell?

My home is appraised for 242,000 and I owe 122,000. My rate is at 2.875%

option one is to get a HEL for $60,000, use that as a down payment for a new personal home, and rent out my current home. 

Current mortgage is $1,000

HEL would be roughly $600

Would hope to get $2,000 - $2,400 for my home for rent 

That gives me $400-$800 profit 

Or I could just sell my house for a profit and use some of that for a new down payment and have some money left over 


You want "advice", here it is; None of the above. 

This is all brand spankin new for you, and your struggling with committing. Your coming on here truly looking for assurance, certainty of a direction being "the" direction and truth is, there isn't any.

So, do the only smart thing, to get that certainty. 

Go rent a place for yourself for a year. 

Yes, rent not buy. 

Than, dip the toes in and get your place rented. 

Heck you could even do the whole round-trip with the same PM. 

See, all you gotta do is make sure your rent for the new place for you is the same or less than what you get for rents on your place. Effectively making it kinda free. 

Because the real reward here is experience without LT commitment. 

1yr to test the waters. No need to HEL and take on added $-expenses. And if your serious about getting in as an investor you'll have the discipline to put buying the next place on back burner for just 1yr. 

And as you go, rate it. Rate your experience of things. 

Within 9mnths your heads gonna be a whole lot more clearer if being a Landlord is the right call, or the wrong one. 

No, it won't be a guarantee of the future but your gonna know 10X more than you do now, personalized knowledge, how it is for you, to you, vs rando's on the internet yapping "do this" or "do that". Which yeah, guilty as charged, I'm one of those rando's too ain't I. 

But my advice is actually that, advice, my only profit is an up-vote if ya find this of value. 

I think this is the smartest way to go about it because reality is while anyone can Landlord, not everyone is good at it or can hack the life of it. It's not a universal fit, and there is a big difference between reading about it and actually doing and living it. 

Knowledge is power, so take the path to get some, the best kind, real world. 

  • James Hamling
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The REI REALTOR®
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