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Updated almost 14 years ago,
Attn BP pros! I'd like your opinion please.
I would like some opinions from the Pros here in BP. Here is my situation. I currently live in a property which is actually to big for me. If It sells at market price. I will net approx 40%. Which will double my cash reserves to buy and flip REOs. I do not have a problem with renting a small place during the recon period. Professional bachelor so I am not tied to familial constraints. Since the RE market crash I have been leary of jumping in. My market area is more of the mid to high end. So, REOs are few and far between until now. I can't show income for the past 2 yrs. I've been trading stocks through a retirement account and cannot show as income. Screwed myself out of future conventional financing. Credit score is excellent.
Which scenerio would you choose in my situation.
1) Stay where I'm at? Pro: Low interest rate on mortgage. Wait out the market for more appreciation. Maybe y-o-y 3 to 4%. Con: Living off of cash reserves from previous RE profits and forcing me into lower income areas to invest. Which are not selling as well right now.
Or
2)Sell my current home. (I know, at or near the bottom of the market cycle). Pros: Net 40% equity profits. Debt free. Double my cash reserves. Recon properties in better neighborhoods and have comfort of the extra cash as reserve. Live in the property until it sells then move on to the next one.
Cons: Can only do one property at a time. At least for now. Which woudl be the same in either scenerio.
I have adopted a traders mentality over the past 2 yrs. Bulls make money, Bears make money and Pigs get slaughtered.
I think I know the answer to my own question. I would like your opinions though. Thanks to everyone at BP. You guys and girls are great.
Chris