All Forum Posts by: Lin Perez

Noted! Thanks you for the wisdom. 

Going the cash out refi option was definitely something I was considering. Here’s a specific question about that route. This unit was purchased in 2006 for $245k and then the market crashed. The value of the unit dipped significantly and has slowly climbed back up over the last 5 years(see the image). If I cash out refi, am I taking a substantial financial risk? Scenario 1: I rent out the unit, cash out refi, reinvest that money in other properties, and the rental unit continues to appreciate or hold. Scenario 2: I rent out the unit , cash out refi, reinvest the money in other properties, and the market crashes. With scenario 2, I would basically have to sit with this property as a rental unit until it appreciated again in order for this to be worthwhile, correct? I’m ok with sitting tight with this property as a rental. Is this really risky?

This may be such a simple question, but I’ve just never done this before. 

Thanks for the advice y’all. 

Looking for some advice after doing some homework on my end. My mom recently passed away and I've inherited her townhome in Central New Jersey. She bought the unit at the height of the market in 2006 for $245k. She owes $138k on the mortgage. I invested $20k into the unit to get it ready to sell but now I'm considering having this property be a rental. Fresh paint, new appliances, new flooring. The hot water heater and HVAC exterior unit will likely have to be replaced in the next 5 years. If I sold the unit today I could get around $266k. Mortgage payment is $1300(includes taxes and insurance), and with HOA costs has me around $1550 in monthly expenses. At most I could charge around $1900 for rent every month. I want to build a rental portfolio but I'm not sure if this property is worth keeping to start that Journey. I'm also considering selling and reinvesting the gains from the sell. Many of the units in this neighborhood are being bought up by rental companies as well.

Should I Rent or sell this property?