Hi everyone - First i am not sure if this is in the corerct thread - i hope it is…
I have a situation where My sister owns a condo in boston - pretty ok neighbourhood (Allston) Served well by bus and T stops. She has owned for a few years and it has not appreciated - in fact, she is trying to sell it and eventually got one offer for 8K below what she bought for.
It rents ok - Has been rented full time while she owns it, however her situation has changed and the condo fees were adjusted to give a negative cash flow at this time. Making the balance is now difficult for her.
THe options i see were First to sell it, however it has been on the market for a while and while it gets ton’s of viewings and second viewings - there has only been one solid offer which was then withdrawn. this offer was below original purchase price - so not too enticing to sell
the second it to rent it - and struggle with the balance payment 1-200$ a month
The third is to refi - interest only with a lower monthly payment and should bring it back to positive cashflow - then hang in there for a while
The final piece of information is that the management company is not that fair to deal with. They own multiple units in the building and So far it has been difficult to get any forms/information from them with detail of the building and ownership etc for potiential buyers. How difficult can a management company get and make your efforts to sell.
So that is the situation. I would really appreciate any advice and opinions about this. What is the general consenses of property in boston at this time. I know its in a down market - is it worth doing a Refi and holding out for a couple of years. What are the downsides of doing a refi…?
It a management company problem as serious as it is better to get out at a loss.?
The management company needs a swift kick in the _______ (Fill in blank with word of your choice). Call them and tell them you will do this and you will do that or I will escrow my payments to you till you do.
I do not know the Boston area that well I do know that it is a lot like Denver where it is nothing more then a 10 year cycle either it is up or it is down.
Now Doogan I know that you want to really help your sister as I know that I would as well if she was mine. That being said I also have the feeling that you want to invest in RE or you would not be on this site. My advice is to hold until you can sell and at least break even. Have you thought about putting the property into a Trust and helping your sister with the negative balance every month. Then sharing the money when it re-sells. And renting it out again. Why not? The negative cash flow is a Tax write off anyway. Maybe buy another house to rent that will cash flow and even this out? Share that one with her as well? There are options out there.
You could try a 1031 exchange for a property that does not have homeowner's association fees. Once again you are dealing with the loss in equity, but you are not married to a bad management company or the expense of refinancing. It sounds like money is a problem, so taking a second mortgage to pay for the negative cash flow might just ultimately magnify your loss, unless you believe that this property will appreciate, rents will increase or fees will go back down. I have not researched this next idea nearly enough, (any feedback would be greatly appreciated) but I would prefer a 40 or 50 year mortgage (I think equifax offers these) instead of an interest only loan. This would be a complete refinance, and you may even need to buy down the interest rate to make the cash flow break even, but these fees can often be absorbed into your new mortgage note.