Ziv Magen, Hello; and thanks for the welcome
Let’s see if I can make this a short "story" LOL....
I purchased the property; in 2003 +/- for 250k with no money down; NICE; right! And every move I made after that was a negative compounding error of a magnitude seldom seen in Real Estate! LOL... I have to laugh....
A few years later; I refinanced out of the 80 / 20 loan; and used the equity to fix up the place a bit; this was a adjustable rate with pre-payment penalties… long story short; when the adjustable was about to mature; the payment was going to go through the roof; so I refinanced in 2009 (just after the HARP) cutoff date; I swear they held up my closing because they knew that date was occurring in the program! The prepayment penalty was rolled into the new mortgage and the market was on its way down etc… so I currently owe 310K on a house that I paid 250k … today’s market value; maybe 270K, the mortgage is 2300$ a month with escrow; and I get 900$ and 1200$ for rent when they are both occupied.
I have given serious thought to just walking away from this mess! It is my fault; I do feel like I was “taken advantage off” with the pre-payment adjustable refi but there is nothing I can do about it now. I really don’t like making excuses and I tend to beat myself up to much as it is….
So, being that far underwater I can’t refi and I don’t qualify for the HARP program.
The house needs some cosmetic work; paint or vinyl siding, some paint on the inside hallways. I just put another 3k into the house for a new roof on my 2 porches….
My last tenant owes me 7k; which I will be going after in small claims; when I get his new address.
I could scrap together enough of a down payment for a 200k mortgage if I needed to but I would like to find a way to utilize a leverage technique or lower down payment to allow myself to hold onto some of that cash… once my cash is gone it will take a while for me to save another down payment. Any passive cash flow from a second property will just be going into the first one that is operating at a loss.
You would think; with the way I messed this up; I would want nothing to do with REI; but it just makes me want to get more involved and become a REI not just a guy who owns a 2 family property! I am glad I found BP but wish I had many years ago…