All Forum Posts by: Matt Kammeraad

Hello Everyone!

I'm debating whether or not to sell my home and upgrade to a larger home.

I purchased my current home as a forclosure in 2011 for $63k. I put about $15k into it over the years. Now, I could sell it in a week, easily, for $145k. I owe $65k on it. After paying commissions, I could net $60k-$70k.

The new house I'm looking at is listed for $290k. I love the house. I've studied the West Michigan real estate market for several years now and I'm positive that this house is listed too high. I believe a fair price - even in this market would be $240k-$260k. Needs a couple of upgrades, but everything is move-in ready, on an acre lot, and has just about everything I'm looking for.

My plan is to wait about a month and submit a low-ball offer of $240k. By then, if the house hasn't already sold, the price will most likely have dropped to $280k. Assuming the sellers want to SELL the house, let's say we land on $265k.

The dilemma is... $265k is a decent price for this house in TODAY's market. No one knows what's going to happen even in the near future. Interest rates are amazing right now, and they could be horrible in a few years.

I'm afraid that if I buy this house at a premium (what I think is $25k-$35k over priced), that the market will calm down and return to where it was in 2013-2015. The house value drops to $220k-$230k, and all of a sudden I have negative equity.

THE QUESTION to you is: Should I remain in my current house and see what the market does, OR, should I jump on this larger house (take advantage of today's rates) and hope the market at least remains where it's at?

If I buy the larger house, I don't plan on moving within the next 5 years.

Thanks.

Hey guys,

I ended up not going through with the deal. I will be in a better position once I have a reserve of cash for my rental property. I can then use this cash in case of an "emergency" such as a new A/C unit, renters don't pay, can't find a renter, they trash the place, etc.

The last things I want to do are borrow money from friends and family, rack up credit card debt, or hastily sell the house.

Thanks for the advice.

Hello everyone,

I'm on the fence with this investment decision since it is life changing! I'll try to fill you in with as many pertinent details as possible. I currently own a 3 br 1 ba house in Holland, MI. It's cute, well maintained, and close to Lake Michigan (decent perks for this area). I bought the house as a foreclosure for $63k and stuck about $10k into it. Today, it's worth about $120k, as in I could sell it within a week for at least that. I have one roommate, who pays $400/mo for rent. My mortgage (PITI) is only $421/mo. I owe approx. $45k yet. Great, right?

I'm looking at moving into a newer, larger house. The market is a sellers market, but there are quite a few nice houses out there for a reasonable price. The one I've fell in love with is a 3 br 2 ba house and is listed for $164,900. There are multiple offers on it, which all will be reviewed this Wednesday. In order to have a chance to get this property, I think I need to offer $170k.

Here's the dilemma... I want to keep my current house as a rental property. I can potentially rent it for $1,000/mo (no utilities included) minus $600 (PITI), which gives me a net monthly income of about $300. That also includes non-homestead property taxes, and 10% maintenance.

Then I can only afford to put down 5% towards the purchase of the new house. That leaves me with another mortgage (PITI) of about $1,100 (4.25%, PMI included). I will bring my current roommate with me and charge him $450/mo (utilities included).

So, assuming I can get the first property rented, and my roommate doesn't move out, my net monthly payment is $250. I'm gaining equity in two properties worth a total of $300k, and I'm living in a newer kick-a** house.

I'm cautious about making this decision because I will not be able to afford the two houses if I can't rent the first house. I would be about $400/mo short. Then, if my roommate moves out, I would be $850/mo short. Another alternative would be to sell the first property and put the profit towards the new house.

I know, "big risk, big reward" but I'm afraid to make the jump. Any words of advice? Thanks!

Matt