All Forum Posts by: Alex Guerrero

@Alex Guerrero, you're asking great questions and @Josh Young and @Kyle Spearin are providing some good options to think through.

I'm a real estate investor that self manages a small portfolio of out-of-state LTRs.  I'm also a mortgage lender and would be happy to talk through the various scenarios to see how each option would impact your ability to purchase another home.

Let me know if I can help.

I'm not sure how much reserves you have or funds for a down payment, but you should be able to buy another primary residence (low down payment) as long as you qualify with your DTI, you can put a lease on your 1st house and the lender should be able to count 75% of that rent as income to help your DTI. Or rent as cheep a place as possible for a year to save for down payment and then the lender can use your rental income on your taxes, just don't get crazy with deductions on your taxes if you are trying to show income. I use Zillow Rental Manager to list properties for rent, screen applicants, sign leases and collect rent, it cost me $10 a week to list a rental and everything else is free, the applicant just pays Zillow $30 for background check and credit report and then they can apply to as many properties as they want for 30 days. Just make sure you take good photos and price the property $50-100 under what you think you can get if you want to get a lot of applicants and get it rented quickly, then you can raise the rent next year.

You could sell and potentially take the loss. But what if you kept this property as a rental instead? Over time it could appreciate in value if you're patient and believe in the historical trend of real estate going up over time. Meanwhile, you'll also get the tax benefits, loan paydown, etc.

Appreciate the response, what’s your advice on getting started in renting out the home? Last thing I want is to take a loss and add debt.

Alex, this is exactly how you build a portfolio of rentals, keep it and rent it out as a long term rental. Can you rent it out for more than your PITI, ideally you'd want to get at least 1.3X your PITI, so you are covering expenses like, maintenance, repairs, PM, vacancy, Cap Ex, but your tenant will also be paying down your mortgage, so you want to consider the principal portion of the payment as money that's going to you, it's not cash flow, but it's important to figure it into the return. In a few years the loan will be getting paid down, rents will increase, home values will go up, and rates will go down (or even if they don't) you can refinance. Buy another primary residence wherever you move to and you will be on your way to building a portfolio of rentals.

@Alex Guerrero...what can you realistically rent it for ?  more than  2K ... if   you selling for 232K  - your  possible  net  proceeds   dont appear to be  huge   ( 25-35K  maybe ) 

what is the  change you mention ?   Maybe its  worth  selling  in order to simplify life as  you  move on