Considering apartment purchase - need help convincing wife!

[Coley Mitchell]

Hello,

This is officially my second post on here since joining last week (first post was a new member intro) and part of the reason why I joined... to get advice on a purchase I've been considering.

Here is my situation. I currently own a condo in Savannah that I purchased in 2006 as my primary residence. I owe $138K at 4.125% interest following a refi last Nov. It rents for $1190. After prop management fees, poa dues, and mortgage payments, I lose about $120 a month. Sounds bad, but I use to lose about $480 before the refi... I place is worth anywhere from $80-$110K. Only comps have been short sales and some foreclosures (it is a 340 unit property)... the Zillow Zestimate says about $110K.

Anyway, there is unit available right now that I think I could get for $70k. My property manager, whom I know well and trust, thinks she could rent it for $1075. Running the numbers on a 30 year conventional (PITI and PMI) with the same interest rate I have on my other property with a 20% downpayment, it looks like I would net about $350 a month, earning around a 20% return on my money.

The kicker is that I would have to get a rental waiver on the unit as the POA only allows for 45% the units to be rented at any given time (and there is a wait list). For the record, I was told the same thing when I moved and rented my unit last time (without obtaining a waiver first) and once it was brought to my attention a well written letter took care of it. I'm still waiting to hear back on whether or not the unit has a waiver already, but I would assume not.

Assuming I could make that happen somehow, do you think this would be a good purchase if my goal was to try and rent it for a year then cash out? I would put all profit back into the mortgage to pay it down as quickly as possible in a year's time. Would also provide a decent ta benefit. We would like to buy a house next year and I thought this might be a good way to possibly double our money in a year or so to help with downpayment.

Too much speculation here??? Advice welcome.

-C