rcardin
Contributor
First time poster so here is a little background. I am a full time teacher in middle school. My dad got into REI a few years ago. I have learned alot from his successes and mistakes. I have done a rehab for him each of the last 3 summers.
I currently own 2 properties.
House #1
My first was a house we bought to live in. 1200 sq ft. During the 6 years I have owned it I refinanced it to a 15 year note at 5%. I owe 11 years on it. 61,000 payoff. 89,900 on the tax roles. Current mortgage is 935 a month PITI and I was owner financing it over a 40 year note at 8.5 % for a payment of 964.83 from the current tenant. In my purchase contract it states that if my tenant is ever late on a payment she automatically reverts to a lease status and loses all down payment and tax benefits unless she pays a 400.00 fee to retain her ownership in the property.
House #2
I bought this through a deal my dad was involved in. Built in 1996, 2280 sq ft Paid 125k (30 year note at 5.375%) for it and is on tax roles at 156.9k. Should appraise for around 160k. I owe 111k on it.
Credit card debt 24k
Here is our idea. We want to cash out as much equity as possible. we are hoping we can get 45k between the 2 houses. Use 25 to pay off credit debt. this frees up about 700.00 a month in payments. More than makes up for increase in house payments. Take the other 20k and put 10% down on rehab property leaving at least 10 k for rehab and monthly cost of holding until sold. We are looking at buyin a 70k house for around 45k. My dad still has contacts with the we buy ugly home boys in town. Due to some past financial help he has given I can get a deal from them barely above what they are paying. Looking to make between 5 and 10 k off of the property.
What am I missing in my thought pattern?
I currently own 2 properties.
House #1
My first was a house we bought to live in. 1200 sq ft. During the 6 years I have owned it I refinanced it to a 15 year note at 5%. I owe 11 years on it. 61,000 payoff. 89,900 on the tax roles. Current mortgage is 935 a month PITI and I was owner financing it over a 40 year note at 8.5 % for a payment of 964.83 from the current tenant. In my purchase contract it states that if my tenant is ever late on a payment she automatically reverts to a lease status and loses all down payment and tax benefits unless she pays a 400.00 fee to retain her ownership in the property.
House #2
I bought this through a deal my dad was involved in. Built in 1996, 2280 sq ft Paid 125k (30 year note at 5.375%) for it and is on tax roles at 156.9k. Should appraise for around 160k. I owe 111k on it.
Credit card debt 24k
Here is our idea. We want to cash out as much equity as possible. we are hoping we can get 45k between the 2 houses. Use 25 to pay off credit debt. this frees up about 700.00 a month in payments. More than makes up for increase in house payments. Take the other 20k and put 10% down on rehab property leaving at least 10 k for rehab and monthly cost of holding until sold. We are looking at buyin a 70k house for around 45k. My dad still has contacts with the we buy ugly home boys in town. Due to some past financial help he has given I can get a deal from them barely above what they are paying. Looking to make between 5 and 10 k off of the property.
What am I missing in my thought pattern?
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