Do I Sell My House To Buy Another Or Have Both?
I just purchased a $50,000($60,000 value) condo in January and I only owe $40,000 left on it. Mortgage Payments with association fees and taxes are less than $600/month. I can easily rent this for $800(my boss rents his out for that much and I actually purchased this from him using rent to own option) I am 30 years old and make $50,000/year and have $40,000 in IRA's. My FICO is in the high 600's. I live in the up and coming Poconos in PA.
The reason why I'm posting anywhere for the first time in this forum is because I have the opportunity to purchase a foreclosed 1800 square ft home with 4.5 acres for ~$120,000. It needs alot of work. New carpets, tiles, paint, love. The septic and well will be covered by the bank. There is some mold upstairs that do not seem to be a problem to fix. My question is - Do I sell my house that I just bought for the $20,000 cash to use to fix up the house or should I cash my IRA to fix up the house? Even though I would lose a lot of money initially cashing my IRA I think the future tax benefits and rental income for the condo will be much better. Any advise would be greatly appreciated.
The foreclosed house sold for $180,000 in Feb 2002.[ Edited by mountain on Date 02/21/2004 ]
Suggestion: Keep your present house - rent it out. Keep your 401K. Find a lender that will give you a 90% ARV loan which should cover all your repairs and purchase with a HELC on your condo for the other 10%
Good luck and make $$$
Tom
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