Need a little feedback/advice on how to extract myself from a condo that I’m living in.
Bought it $58,700 with seller paying all closing costs, put down 20% with a conventional 6.75% 15-year fixed for the rest, back in May 2001. Now nearly four years later, I owe about $39,000 on the place, and I’m exploring selling it for two reasons…
- to extract equity for a down payment on a duplex that’d I would live in
- to prevent possible equity loss due to rezoning, increase in crime in area and flat RE market
This condo (1/1 with a loft…some RE agents list the other units with this layout as a 2/1…567 sq. ft) is in Area 9 right off of Oltorf and Burleson here in Austin (an area where there are businesses/apartment complexes…mostly college students and lower to middle class workers…we have some migrant workers that live in the duplexes across the street…and a convenience store next door that seems to get robbed every couple of weeks or so…some people describe my complex as an oasis for the area). If I were to rent it out/sell it, most likely I’d have to do some cosmetic work (paint, carpeting, etc.), which I can afford to do out of pocket…no problem. However, my current outlay for the place (mortgage/taxes/insurance/HOA) is around $670 right now (probably higher if I move out and lose the Homestead exemption on it). From the rent levels I’ve seen around my neighborhood, I think I’d barely break even, or, most likely, be upside-down on it, if I rented it out. As for selling it…there were two other units within the building of 12 up for sale at $49,900 each with slightly less sq. footage (499 versus 567)…however each one, when I looked through the window to be in better condition than mine (wood floors, better paint job, etc.). One of the units I believe has sold, and the other unit had the sign from its window taken down.
My first thought to solve this was lease option…however, I wouldn’t be able to extract the equity out to improve a duplex purchase’s cashflow. The last thing I want to do at this point is list it with an agent/Realtor and get my equity cut away by commissions. I’d like to use this situation as a learning experience to creatively make money.