gut wrenching cold hard facts

suz1023June 8, 2012

the agent was here this morning to give me an idea of how much to sell our place for.

it's so far below what we need to make it work, i think we may lose the house we want.(a house i've been keeping my eye on as my future home since forever)

our town is a bdrm community with a few farms and a chronically ailing ski resort. it just doesn't have the sex appeal other resort towns have.

still i'm going to meet with a mortgage agent monday and see if i can buy the one i want to live in and keep this one as a rental.

i'm not quite ready to give up--i may be down but i'm not out. (or i am out and am delusional, that could be too).

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brickeyee

"still i'm going to meet with a mortgage agent monday and see if i can buy the one i want to live in and keep this one as a rental."

Not nearly as easy as in previous years.

You will probably need enough income to cover both mortgages, likely without a tenant.

Things like a signed 12 month lease used to be adequate to get started.

    Bookmark   June 9, 2012 at 8:41AM
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trilobite

I can see this ending badly. Renting is very hard on a home, so consider for future sales, that your home will probably never look as good as it does now sans some significant cosmetic attention. I am going to guess cash flow is a bit of an issue, what happens if the rental home suddenly needs a new furnace or other big ticket item? Best case scenario, you will resent having to keep diverting money into the rental.

Trust me, I take no pleasure in saying this. I'd like to move myself, but we're buttoning down and putting money into our current home instead. It's (sigh) the sensible thing to do.

    Bookmark   June 9, 2012 at 10:32AM
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palimpsest

You will need to be able to cover both mortgages. They are no longer so generous in including potential rental income into the equation, at least my lenders were not, and I have an excellent credit rating.

I would also see this ending badly. I am currently in the place I am trying to sell and renting out the house I want to live in, for the reasons trilobite says. My house is actually pretty pristine, but if I were Staying, there are things that I would still do, but since am Leaving, I am loathe to do anything additional with no return on investment. And I live in fear that my SubZero will suddenly go irreparably bad, and I will have to spend $6K on a new one for a house on the market :c/.

The condition of the house I am renting out is okay, but the tenants clearly are Not taking the care of it that an owner would. That is just going to be the status quo with most renters.

    Bookmark   June 9, 2012 at 11:49AM
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suz1023

you folks are right about renters--ime one must be a certain personality to be a successful landlord, and i am not tough enough.
it may be best to walk away with enough to get into the new house.

    Bookmark   June 10, 2012 at 11:28AM
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polie

OP, would this be possible: could YOU rent the dream house from the seller while you put your own house up for sale? Of course, s/he might just want to be done with it and sell it ASAP, but if you know the seller maybe s/he could work something out with you.

If your town isn't considered all that great, fairly or unfairly, I do think it's risky for you to buy the dream house while renting yours with the hope that someday your town's real estate market perks up.

    Bookmark   June 10, 2012 at 4:55PM
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Billl

It's fine to want a "dream home." However, you need to have the money to comfortably afford the dream home before you even consider buying it. If you don't have the money, you don't have the money. Don't go searching for a lender that will do backbends to get you into a place you know you really can't afford at this point. Lots of people were doing this type of thing a few years ago and lots of lenders were cooperating, but it ended really, really badly for most of them.

    Bookmark   June 11, 2012 at 9:01AM
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