All Forum Posts by: Emily Reddington

@Erik W. Haha! You are right, I have started taking measures to let the tenant know if her increased portion of the rent is not received , then we will have to start taking measures. *I see our first eviction in my future..*

We only lived there about 1 year. It was not ideal to move so soon, and I was 6 months pregnant at the time too, however it has been a great choice. Therefore from all of my research, the only way to avoid paying the Cap gain taxes is to do a 1031 exchange, correct?

The house is currently 2 hours away, if we reinvested into another property I would buy in the city we are currently living in. We considered selling the house when we had to move, but thought we could manage it from here. It has been okay, but you are correct, I would much rather have a rental here.

We both have great credit for our ages, so I am told 790+, but I am no longer a full time employee, so to qualify I believe it would have to go under my husbands name? Or is there a way a bank would finance me? Previously I qualified for significantly more than the house was ($280k and the duplex was $130k) but now I mostly stay home with our son and have limited income. 

We do invest into index funds, but would really like to get a real estate portfolio as a replacement for my income ( har har, I know lol)

Again thank you so much for your wisdom. It very much has me leaning towards selling the property, and reinvesting closer.

@Erik W.
Oh it works! I replied above :) 

@Erik Whiting 
My tag isn't working either! But thank you for teaching me and also checking back in!

We will have equity in the house to use towards a down payment. The estimate the mortgage company estimated is about $40k, possibly a touch high but do you think thats a better option than just renovating it and re renting?

It would be nice to have our rental to be NOT 2 hours away now lol

@joe villeneuve 
You're completely correct. 
Our reasons would be-
-It has the potential to be a great cash flowing property (whenever I decide to stop subsidizing housing)
- We bought it on an FHA so have little cash in it
- our interest rate is 4.625% and Im afraid we wouldn't be able to get this again
- we love both tenants
- Its in an appreciating market

Not opposed to selling, especially in this bull market. But also unsure about investing again because where we have moved housing is 3x the price and Im not sure the equity would be enough for a down payment, and we would want to roll into another to avoid taxes.

@Stephen 
Im so sorry I meant to say conventional but it can not be residential. 
According to the mortgage company the added interest would make our payments about the same. I am very interested in this! Maybe I should shop around? We have a 4.625%. Is it possible they could be incorrect?

@JD Martin 
Very good analogy! Honestly I hadn't even thought about needing to foreclose on the house. If it came to that we would more than likely sell it and take equity and roll it into another investment.  But again Im just not sure if we want to let it go. I feel like the clingy person in the relationship that puts up with all the bad baggage and no one can figure out why! Hahahah 

Stephen, would you mind elaborating please? I called the mortgage company and according to them I would not be eligible for a residential loan on this house since we don't live there anymore. And the difference the increased interest for a commercial loan would put me with the same mortgage payment. 

Also Erik, as far as selling it goes...
We have also considered this, but hated to give up such a low cash invested and low interest rate property that (if I can stop subsidizing rent) create good cashflow. 
We bought the house on an FHA and have now exhausted our FHA's. So the next investment would require a hefty down payment and a higher interest rate possibly.
Or maybe not? I guess we could BRRRR

JD!
I just need to say I need more friends like you all in my life ha! Everyone is so straightforward on here! I think people who know me personally know this is hard for me so they're more wishy washy. I am defiantly a philanthropist, however we can not have negative cashflow. 
I am perfectly fine just breaking even on the property, as yes it is appreciating and of course paying off the loan leaving me with the equity. Although I do question if I am cut out for this game when things like this happen. 
 
As I posted above, when I work the numbers for turnover we would be looking at about $3-4k in lost rent and renovations. So is it not a good idea to save the headache and let it ride for 10 months? 
Probably an arbitrary question, and maybe I am just justifying it.

What would you personally do? Invest the $4k to be able to increase the rent by $300 and just hope to get another great tenant?
Thanks for keeping me in check guys. I truly appreciate your time and knowledge!

Eric W. 
Thank you so very much! I have been a long time stalker and daily reader/ listener of BP, but never posted myself. I am so grateful for the amazing community here and all the help!
This was probably the reality check I needed. My husband does agree with you as we really can not afford losing $300+ per month right now as we build our real estate portfolio.
I completely agree that with already receiving money from the government that it would be more "fair" that she would have to be the one making the sacrifices to reflect the money she is receiving. However, I do believe she is one of the few who actually *needs* the voucher. (Am I allowed to say that out loud?). 
But this does not mean that we can make up the difference. 

My other concerns are turnover. With the several kids in the house we are looking at approximately $2-3k for renovations to rent ready the unit again. If we are now losing $300 per month, that would be the equivalent of letting her stay there 6-10 more months, plus the turnover time of one more month in rent. So our out of pocket expenses would be $3-4k. Plus we would lose our dream tenant. 

I truly appreciate your answer and helping me weigh the pros and cons!