Seeking advice on my personal residence

[Zach Ziskin]

Hi all,

Here's my situation and what I've been thinking of doing, and wanted to see if anyone here has any different thoughts on the matter. OK, here goes.

My wife and I live in a townhome which I purchased 12 years ago. It's almost paid off (I owe about $30k on the mortgage, which I could pay off now out of savings if I wanted to). The current FMV is in the $175-185K range.

We live in South Florida, which as you all know was one of the RE bubble capitals. Based on what I've heard from various trusted sources, many feel that there is still substantial downward price movement to come in this market. At the peak of the bubble, these townhomes were going for maybe $220k, so it's already come down $30-40k.

With that in mind, I was thinking of selling our place and maybe renting for a little while and ride out further downward price movement, and eventually find a single family home at a great price for our primary residence, which is what we've been wanting to do for a while (maybe an REO or pre-foreclosure).

I was thinking that since I have a ton of equity in my place, I can be pretty flexible. Originally I was going to just sell the townhome, and put all the cash into an interest bearing account while we rent for a while. But a friend suggested offering seller financing, maybe a 2 year interest only balloon, which would open up the pool of potential buyers as well as yield a higher return on my money, and of course if the buyer defaults I could always take back the property and sell it again.

So my questions: 1. Assuming there is more downside to come in the market, is this strategy a good idea, and 2. Does anyone see any other or better options given how much equity I have sitting in my place? Thanks in advance.