Board Topic: Can this work? Sell home in NE rent apt. build and rent
Click here to view this topic in its original format
LoanUniverse Community > General Chat >

Can this work

Posted by: antoninacurrao Sep 29 2004, 01:02 PM
Hi, I am a widow of 15 years, age 55. I need to work for at least 10 more years. I own a small home worth $265,000 in the Northeast. I owe 60,000. on the mortgage.
My taxes and homeowners have raised my mortgage payments to 1054.00 a month. Then I need to pay heat(1200.00 a year)
Home maintenance (about $2000.00 a year) and all the other bills which would follow me anyway.
I don't drive, so I rely on a ride to work for the past 20 years from 2 people. They will not let me pay for transportation, as I am on a main road and they don't go out of their way for me.
I would to rent a 2 bdr apt within walking distance (3 blocks)from work for $1000.00 a month + minimul in utilities. Then I want to sell my house pay off my mortgage and a 401B loan of 14,000.00. This would free up an extra $400.00 a month from my paycheck
I want to build a new home in Fl. near my brother-in-law who is very gifted in home repair and building and rent it out so he can oversee it. I would spend about $200,000.00 on this home and I would carry a small mortgage.
What do I need to consider before I do this?
Thanks for any help. I need all the questions and ideas that you can give me.

Posted by: loanuniverse Sep 29 2004, 03:18 PM

Your plan does make sense, and should if you are careful about the property and the tenant bring you a better return than taking the $200,000 of proceeds and putting the money on a CD. The following are some ideas and feedback that came to mind after reading your message:

1- Any particular reason why the income producing property needs to be a house? I mean if the numbers are there is great, but one house = one tenant. Leveraging that money into a multi-unit apartment building sounds more appealing to me.

2- I do not like the idea of building your own. Sure it has potential for being a little cheaper {not always the case}, and you are also getting the benefit of building the house to your liking {but you are not going to be living there}. However, you will not be making money on the months to a year that construction will take, and building can cause a lot of problems.

3- I like the fact that your payments will be going down, this means that you won’t have to touch that money for living expenses and will actually feel better off.

4- You are relying on your brother to manage this property, what would happen in case of a falling out?

That is pretty much it for now, good luck.

Comments are closed.