Good Idea Or What??
I recently purchased a newly constructed condo style townhome about 3 months ago for x amount of dollars. I have since talked to two realtors about my particular development and they both stated that majority of their clients in that area wanted to buy in my development....but they sold out too quickly.
My neighbor who has the exact same floorplan as I do just had her house appraised and she said it was worth 35k more than we paid for it.
Now...with that being said.......would it be a good idea for me to take the equity out of my condo and purchase another in a new development........and then rent out my condo??? Has any one done anything similar to this??
I think it would be a good start........[ Edited by tall_individual on Date 01/14/2004 ]
I have a friend who recently did the same thing, but with his house. Yet, his time frame was much longer. He had lived in the house for 2 years. When he realized how much it had gone up he moved rented it out, took out a HELOC and just bought a bunch of land to build "the home of his dreams" on. He has a vacation cabin he rents out plus two condos on top of the house. He's pretty set and very smart with REI (as his dad is in it too). Yet, just to give all us newbies a sense of what it takes to survive in REI, this friend I speak of barely graduated high school.
I have only two concerns with renting out your condo your in and pulling out equity to put down on another condo:
1) The seasoning of your loan. Will your loan agent allow you to take out another one so soon?
2) A loan conversion on a loan made so soon. Since the loan will go from a OOC (owner occupied) to a NOC (non-owner occupied) I wonder what type of fees may ensure.
I would talk to your lender to see what is possible, or to other lenders to see if you can roll both loans into a trust of some kind.
Lets see what the smart ppl say.
Hmmmm......I wasnt aware that u had to wait to take equity out of your home. I'll have to read my loan doc and see if there is any stipulations in there that prevents me from doing so. I thought you could refi at anytime.......
I dont know much about trusts....I'll have to read up on that.
[ Edited by tall_individual on Date 01/14/2004 ]