My home was built in 2001, I purchased it for $204k. I just put it on the market yesterday for 509K. Im not sure what I should do with the proceeds. I want to build a smaller home on a lot I want to purchase but being new to this game Im not sure If this is the right time to do it. I live in Southern Maryland about 10miles from Wash DC.
Should I use the funds to purchase small fidxer upers? I want to use the funds wisely & make it grow fast. Any suggestions? :
You can do what I did last year…take the proceeds and move from the DC area to somewhere that you get some value for your money!
We sold our townhouse (actually, we had a bidding war for it and got $16K over list) and moved. Now I can use the proceeds for investment properties (and have). I took a lesser paying job but the cost of living is lower accordingly. We paid off all of our bills except our new house (it’s a beauty!) and life is good (hot, but good!)…
Keith
That is an interesting trend that is growing now. I bet in the coming years, we will see a huge migration to lower priced areas.
For example, if you had a standard home in Vegas that you bought 2-3 years ago, you could probably sell it today, move to Houston, and pay cash for a better home than the one you sold. No mortgage payment. Might not want to pay all cash, but you could.
Why don’t you rent your home pull out some money and get that other property you want.
Mr.Dizzo- Why rent out such a nice property? I would be pissed if a scum bag tennet trashed my “new” 509K home. Sell it while the gettin is good!
cateyes- Have is been sold yet? Because you say you put it on the market, that doesn’t mean anything until cash is in hand. Also are you relocating? Moving out of the area? If so look for an area that has not gone crazy in appreciation, pay cash, and use the rest as investments for retirement.
It’s the DC-area…unless it is garbage over way over-priced, it will sell in a week…
Keith
Your right Keith, but I am just business savy like that. I never go counting my money until it is in my hand. I guess I am “old skool”.
We listed our townhouse on a Friday, had open-house on Saturday and had 6 full-price offers, 5 with escalation clauses on Sunday. It sold for $16K over list in 3 days…
If your house sold that fast congrats to you and your pocket book! I put my house on the market on Tue, today is Saturday & still no offers. Several people have stopped by to look at the house & said they absolutley love the house, they say it looks like a model home. I think the price is to high but everyone else tells me the price is just right. Am I being inpatient or what?
We are selling the home just because we want to cash out while we are young & build another home & invest in some fixer-uppers in Freeport, Ill. We do not plan to leave the D.C area because we like it here in southern Maryland.
I think Im gonna have a open house next weekend.
Is there any other homes like yours for sale? And if so are you high, low or average? Sit back and see what’s happens!
I would refinance the house at the lowest interst rate possible I would do the pick-a-payment loan that starts at 1.95%. I would take the money and start looking for your new home, land or what ever you decide to purchase. If you have taken most of the equity out of the house you can do an OWC or a lease option on the house.
You can definitely afford to build your future home while waiting for your primary residenceto sell.
i definitely don’t think now is the time to get adjustable rate mortgages.
[although i have a few myself] i definitely wouldn’t advise anyone else to get them unless they plan to sell in the next 2 years.
i would sell the house and buy your dream house. or alternatively buy income properties with atleast an 8%+ cap and use that extra income to qualify for your
dream home.
Wouldn’t it depend on what the adjustable rate mortgage consisted of.
We have a 2.25% for 5 years and the 1.95% ARM is based on the COSI (Cost of Savings Index) from a portfolio lender which means if the interest rate goes up you can put your money into a savings account or a 90 day CD and earn money.
All ARM’s are NOT the same and when you are investing in real estate you are looking to maximize your cashflow and minimize your IRS liability.
When investors refinance they are putting idle dollars to work. Mortgage interest is deductible, When a homehowner uses a mortgage t borrow at , say 8 percent, (awfully high for today’s dollar but can inch up as cap on some ARM’s)
It really doesn’t cost the homeowner 8 percent because the interest is deductible. Under current tax law, the only preferred interest available to the average American is mortgage interest.
But the monthly payments are what we are really concerned about and the ARM can create cashflow and free up money for other investments.