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Updated almost 12 years ago,
Upside down on second property
Hello everyone. My in-law has a special situation and I'd like to help her out and look out for her best interest. She has been a great help and a positive influence in my family's life and I wan't to help her out on finding a benefitting solution for her, if possible. So, I come to you guys for your help.
Now, on to the issues. My aunt owns two properties just to help out a relative who couldn't qualify to purchase his own home. She resides in property A, and relative resides in property B. Relatives are moving out and the mortgage is under her name thru Chase. Relatives makes the pmts which is an interest only loan (adj) and was opened in 2006 til present. (I read up on Harp 2.0 but have a few unanswered questions.)
I'd like to know what her options are from an experienced and knowledgeable investor's point of view on how she can get out of property B being upside down.
My thoughts are refinance property B (would property B be categorized as an investment property?) to a fixed mortgage (with who, what, where) renovate property B in hopes to increase value in the future, move into property B after renovation and hold til value catches up or exceed and maybe cash out, Rent out and hold property A in the meantime. I think the mortgage pmts on property B will be too high to try to break even as a rental unit.
What do you guys think? I don't know what other creative strategies you savvy investors do, so I bring this situation to you guys in hopes I find a solution and learn from this experience. I am open to anything and everything and will look at all options that you guys send my way.
Below is a list of details I have for now about the properties. Let me know if you guys need more information to better paint the picture.
Property A
Owes (???)
Mortgage pmt (???)
Guestimated from Zillow $280K (I know Zillow is not an accurate figure. Im just using it to get an idea.)
No late pmts
Property B (Alhambra, CA)
Owes $520K
Mortgage pmt $3K (adjustable) thru Chase
Guestimated value from Zillow $420K
No late pmts
Excellent credit
Sufficient income to qualify for a new loan
Thank you all in advance for your inputs and I greatly appreciate every single one of them.