the cons with it is that if you stay in it long time, you could end up in a negative equity situation..because your payment is lower then the p&I and ther is no principal going towards the balance..that is if you continue using or paying on the neg am choice..the option arms and neg am's are really popular in California..but their making their way across the u.s.

Hi folksI live in southern california and I am wondering what to do with the townhouse that I used to live in as my principal residence:Bought in 1999 for $350,000 (4 bed 3 bath townhome)Current Market Value: $725,000Current Loan amount $235,000Monthy loan payment $1920/mo(15 year loan; 5% fully amortized loan; 11 years left in the loan term)My wife and I moved out last month and we have a renter in the property now:Rent: $3,000/moHOA: $250/moTax: $400/moInsurance: $200/moIs it better to keep this property and let the tenant pay off the mortgage (currently have 5% loan) or sell it.I'm currently renting in L.A., looking to buy a sfr for my family.

I understand the principal of the sub 2 but nut sure it would work here as trhe owner wants tro get something out of the deal.

Mark,Would you be acting as a principal or broker on the deal?

I just am uncertain of how the lenders are to deal with as a principal....what is your opinion if I may ask-or this topic is open to other views as well-I am open to feedback from all sources.

Don't forget to factor unexpected repair costs, closing/financing costs when buying, closing costs when selling, PITI (Principal, Interest, Taxes, and Insurance) payments while you are fixing up and selling, and realtor and/or advertizing fees to sell it.And now I'll give you by far the NUMBER 1 newbie mistake in real estate investing. . .. . . buying a property too high and TRYING to sell for even higher.So, Alex, to summarize my input:Experience tops book knowledge.

Let's assume it gets appraised on the low end of 180.So the "sweat equity" is 180k-157k=$23,000 (this number includes the labor and materials paid...does not mean i actually spent 23k)If I tried refinancing after a year, assuming they still give me a 6.5% rate, does it mean the principal on my loan would now be:125,600-23,000 (sweat equity)=$102,600?

steps to follow, rental agreement forms, info on how to figure out what to charge as rent, after they lease for a year or 2, how much do they get a loan for--the original sale price or does any of their rent payment go towards the principal?

This deduction provides a tax shelter that can shield positive cash flow, as well as the equity buildup occurring through principal reduction on the loan, from taxation.

Interest rate of: 6.375%With Points at: 0.442APR: 7.027%Lock period 30 daysEscrow: yesYour estimated monthly payment for principal & interest payment is: $623.87closing costs = 2824.50pre pay interest = 523.97