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jwilder987@yahoo.com wrote:
> I purchased a home for $250,000 100% financed. With all my monthly
> expenses and offset by rent, I'm negative $500/month or $6,000 per
> year. The property shot up in value just after I purchased it and it
> appraised for $310,000. So I've $60,000 in appreciation.
>
> Is there any reason to keep this property? The way I see it I'm eating
> into my potential profit $6,000 per year. Should I sell it? If I wait
> 366 days to sell will it be just a flat 15% long term cap gains tax?
Selling is an option to eliminate the neg cash flow and so is
refinancing into a more investor suited mortgage loan.
There are interest only and deferred interest loan programs that allow
investors to reduce the mortgage payments by up to 40% compared to a 30
year fixed mortgage loan.
With a deferred interest loan, the PI (principal and interest) only
mortgage payment would be reduced from 1499 (based upon a 30 yr fxd for
250K @ 6.00) to approx. 1047 (this can vary depending on the loan
program/lender you choose). These lower payments can last anywhere
from 1-10 years with only modest increases per year (The example I'm
using allows for a 7.5% in monthly payment [not interest rate]; so your
2nd year payment would be 1126, 3rd payment would be 1210 and so on).
Based on the loan program I'm referring to, you would have +5 years in
which your payments would be lower then they are now.
There is alot more to this type of loan that I didn't go into, and you
should review this matter with a competent mortgage professional so
that you fully understand the pros and cons before proceeding.
Regards,
Scott Miller
Commercial and Residential Lender/Broker
1.877.716.6495
EZMortgageLoanz@aol.com
www.RealEstate-IQ.com
www.EZMortgageLoanz.com
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Re: negative cash flow / should i sell?
