Marcpereiraabc1234
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Need help with investment property
« on: Today at 05:34:46 PM »
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Hi Savy Team,
I have a financial scenario that I don't know how to proceed.
My previous house is being rented now and I don't know if I should keep it being rented or to sell it.
Here is the breakdown:
House purchased for $784,000. Improvement 20,000.
It was purchased in 2005. The current loan was a 7 year ARM. The house rate today is Libor 6 months + index 2.5 Today's rate is at 3.125%. This was a 7 year interest only loan at first.
I have been paying all of these years (almost 10)
The balance is 535,000. When I bought this property I gave 210,000 down payment.
Currently the payment is 2900$ + 700 CA taxes monthly+ 50 insurance. (Monthly)
The loan break down is $ 1600 principal and $1300 interest.
The problem is that the money that I collect from rent is only $2900. The taxes and insurance, I need to pay from my own paycheck every month. About a $700 negative cash flow
What should I do? Keep house with same ARM? Refinance? sell?
The ARM loan is a 6 months Libor. With a Max increase cap of 1% a year.
The current loan balance is 535,000. We think with the house market improvement we can get around 700,000. ( minus sales commission. we hope)
We have a great tenant for about 1 1/2 year with a lease to expire in May. We haven't raised the rent since it has been rented in 2013.
Estimate 2015 value 700,000
Estimate 2013 value 530,000
Paid for property $784,000
Current loan value is 530,000 (21 years left)
Since I placed this place for rent, prices have gone up!
Thanks for any feedback that I can get from this discussion group. Regards,
