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The house is on the market for $279K. We have an agent, which is what is gonna put us under. We would make out if they didn't get 6% of the sale. The realtor has been incredible though, and she definitely is earning her 6%. The payoff is roughly $263K after fees and stuff. So that breaks us even. There are houses that are almost exactly the same as ours, I think they are built by the same builder, at $300-$305K. I'm not sure about comps, it's been on the market so long, those numbers we had are probably irrelevant. We'd have to get new comps.

At this point it just either needs to go or needs to be offsetting the mortgage somehow. Selling a house for a year is quite painful. I think we can drop it to $275K and that would be absolute bottom for us to walk away unscathed. But seeing as it's a buyers market, we probably wouldn't get full price, which is why it's priced the way it is.

Forgot about the second mortgage, which we will never do again. Took out the second, paid off bills, then got a pay cut and tax increase in the same year. So bleh, lesson learned. In fact the second is what is killing us, I'd say. So looks like I'm out of the REI market till we get rid of this house.

Thanks for your input...

It's not that I'm intent. It's just that I have a brand new house, that I got "burned" on that I am trying to turn around. Everything I've heard so far has been sell, sell, sell. I'm trying, nobody is buying. We've already lowered the price twice, to a point that we probably now wouldn't break even. If that's what needs to happen, then fine, it'll eventually sell, I'll take a loss. I'm still gonna look at renting it though, cause to tell you the truth I don't have the cash to pay for the loss, well, because I'm paying the damn mortgage :). So I'm stuck. How does one get unstuck here? I guess thats a more valid question. If I need to take a loss, how the hell do I finance that? Put it on credit cards? Wouldn't that be worse? I guess once the mortgage is gone I could pay the credit cards back faster, but that's still gonna create additional loss, due to interest in the time that it would take to pay it back. So am I doomed to take a bigger loss now? sounds like it.

Thanks for all the info you guys have provided.

Wouldn't keeping it also increase my equity, which would eventually turn the cash flow positive? If the house is $260K now. In 5 years it increases in value to to say $320K. That's ~$35K in profit for a $400/month ( the difference in my mortgage vs their rent ) investment over 5 years, no? Plus refinancing would bring the mortgage down at that point and rent increases could happen too. Of course you would need to take out maintenance and stuff, but say that's $1K a year. That's still $30K, and from what I've been reading, a management company takes like 10%. So another ~$10K for them... so bottom line $20K, plus the benefits on my credit report so I can purchase more properties.

I am starting to get the idea that nobody here recommends long distance rentals :) but that's what I have to work with. I understand that I probably shouldn't start the whole thing here, in my transitive location, but where I want to end up. So yeah, I'll read more into and research the areas we are interested in living in. I ultimately want to be become my own manager, but... bleh.... I'll read some more :)

My numbers are probably all wrong, and I don't think the market is that strong where I would see a 20-30% increase in value over 5 years, but isn't that whole point of this? to take risks and reap the gains IF they happen? Isn't the real estate market volatile enough that there are no sure wins?

Not trying to argumentative, just trying to understand.

Thanks

Just have a thing about Java :) Once you've messed with Java installers, you never look at Java the same way. I always have an IRC client open, so that just would've been my preference. Not a big deal.

Thanks for the quick response, look forward to seeing some members in there.

Is this located on an IRC server somewhere? I'd rather use my IRC client than a Java client if possible. From looking at the website for AddonChat, it looks like it might be a proprietary protocol. Any ideas?

Thanks

Not trying to ignore your advice. Just don't know what I'm talking about yet. Your response basically says don't do it, but doesn't say what I should look into doing. Sorry if I came off as looking to confirm my ideas. I'm just looking to get into the business.

Long distance landlording isn't a good idea. But I don't wanna live where I landlord. I don't wanna live in downtown Boston if that is where the good rental properties are. I guess I'm not cut out to even think about this...

Reference to the negative cash flow was for the current house I own, that I pay out the nose for, that nobody will buy, without me basically giving it away.

And yes, the price of the house is where it was 2 years ago. I will be taking a loss if I go any lower.

I'm looking to retire at 50 as well. So I need to start now.

Thanks for your advice.

I understand what you are saying. I'd love to sell the house and just start new, but isn't this a good opportunity to get into the rental biz? I know the first deal is always a loss, I've been reading that, but at least I'll learn how the rental market works. I want to get into the rental biz anyway, and I'm sure that not all my properties would be in the same location. We are looking for cash flow, not quick bucks. I know I will get negative cash flow, but the equity is still there. From your responses you are saying just sell it and don't buy anything else. That's not what I'm looking to do. Are you saying sell it, don't buy anything, move to where I wanna live, and then get into the biz? I'm not sure where exactly we will be and what that market will be like, and that won't be for another two years. Isn't the best investment advice to start NOW, no matter what?

Thanks for your responses, I'll take them into consideration, but I want to get into the biz, and selling and not buying I don't think is a good opener. Then again, I'm a noob :)

The house is priced below market by the way. All houses in my area are stagnant. We've already lowered the price twice to compete, and with the mortgage the way it is, if I go any lower, I'm gonna take loss anyway. At least as much as taking a loss renting for a few years.

I'm not really sure what this means "Knowing that you'll have other costs close to 20% of your rent means you're losing 50% per month, not a good spot to be in. " Currently I'm losing 100% of the mortgage, plus utilities to keep it alive, plus bills to unfreeze the pipes ( which is my fault, but it's a bill ), plus money to pay a kid to mow the lawn, etc, etc, etc.... all this while earning equity, albeit slowly, it still counts.

Thanks again....

Da Noob :)

Currently we own a 2.5 year old house. We bought the house because it was brand new, and it was in a place where we thought we would live for a long time. Long story short.... Taxes went up drastically, a paycut came at work, and we were basically at the point that it could've gotten nasty. I found another job in another state where we currently rent ( for the price of a mortgage, more on that later ). The house has been on the market just about a year now.

Currently we can comfortably live with a mortgage and rent. My job isn't permanent, but it's not going away anytime soon either. The wife is climbing the corporate ladder rather successfully. If I lost my job for some reason, I would be able to find another here ( I've lost one before, and it sucks ).

In our new location, it's a booming area, and rentals are getting snatched up like crazy. We could easily afford a lesser priced house and live in it for now instead of an apartment. We plan to leave this area, most likely, within 2 years or so. I don't like the area, but it's a booming real estate / job market. People are moving here at very rapid pace.

So this all started us thinking about starting a rental business. I would like to start renting the old ( new ) house and try to recoup some costs. I could probably get about 70-80% of the mortgage, but I wouldn't be paying gas ( it's in a frigid area - in fact the pipes just froze, which brought us to this thinking ), electric, etc to keep the house alive while it's on the market. It doesn't look like it's gonna sell anytime soon, but it will most likely rent fast. We could absorb the loss, while accruing equity. That is fine with us.

Which brings in the second house. If we can comfortably afford it, and we can easily get rent for it when / if we leave, shouldn't we take advantage of that and buy something now? If we rent out the first house, we could easily afford the second, while keeping money in the bank to support both when needed.

I guess I'm looking for some advice as to if this is a stupid move to make. Granted I haven't thought about it as in depth as I'd like, I plan on looking into this pretty heavily over the next few weeks. Our lease is up end of April, and if we can get a house rolling by then, that would be best.

To add to all of this, my parents will be in retirement soon. They just came into some money, not a ton, but enough, and I know my dad would wanna get in on this down the road. I know he would help out if things went bad, as well, although I prefer to fend for myself. I wouldn't use the wildcard unless I absolutely needed to.

Anybody have some general guidance? links? book recommendation? I plan on reading everything I can here, and I've found a couple other good sites, one being TLPA. I think this might be a great opportunity to make some real money and become self sufficient. My wife would probably never leave her job, so we will always have her income and retirement plans, but I could easily leave my current position sometime down the line and do this full time.

I'm really excited, and mostly lost at this point. Any guidance would be appreciated.

- Thanks