April 14th, 2010
should i take out a home loan if i cant sell my free and clear home i just purchased?
i just purchsed a forecloser free&clear in detroit for 25,000 thats worth 100,000and im wondering if i cant sell it fast enough (3 months) should i just take out a home loan and keep and pay interest on the loan while trying to sell it to invest in other properties that may sell before my original 25,000 purechase to keep leverage on my money?
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Filed under: Sell Property
Did you have it appraised, Detriot is one of the worst markets out there. I would be looking at cutting bait and running for a competitive % less than its appraised value is…lets say its worth 75K…then I would put it on the market for $71250 (5% less than market) and dump it. The entire housing market is in the crapper, I dont care where you live, properties are still taking a dive. the longer you wait, the more youre going to lose, plus, if you take a mortgage, rates are going up, and you will be losing on that end, too. if you got it for a song at 25K, and can offload it for a few more bucks, get rid of it.
OR, you can take a chance on renting it. If I were buying to rent, I would not consider offloading the property for 7-10 years. our market is going to dive for at least 2 more years, then theres level off time, then a steady rate of increase after that….were talking about some patience, here. Good Luck to you, I hope you made a great deal!
No no no no no, bird in hand and all of that. Do not overlook what you have in order to chase what may happen, all you do by taking out in order to leverage is reducing profit on the home you just purchased when you make the morgage payments and will make you more willing to accept a worse deal to move the property… right now you can afford to wait for a good offer and only need to worry about upkeep and property taxes, if you try to extend it into a 2nd or 3rd property then you have increased your expenses exponetially and might find yourself making a lot less in the process. Be paitent and you will find that you will be rewarded.