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OK-Part of me thinks this is crazy, but the other part says it's brilliant! (I could use all advice)
Here's the set-up: I own my own home in Kansas City, and it has been for sale for 6 months. I planned to move to a rural part of New Mexico for years. I got layed off from my job in the medical field and decided instead of getting another job in Kansas City, I went ahead and moved to New Mexico, even though my house hasn't sold yet. (But I am only paying taxes and insurance, NO mortgage.)
Then I find the house of my dreams here in New Mexico! Is a bank-owned REO. The house itself is Circa 1980, too small and out of date. It seems ok structurally, (but you probably wouldn't want to live in it the way it is) but the land (2 acres) is phenominal!! Views as far as the eye can see...
I had a contractor and architect look at the house, they say they can totally remodel it, add a bedroom, new deck, roof, carpet, fixtures etc. easily for under $150,000. Essentially giving me a new house.
The house (as is) & land are listed for $100,000---dirt cheap, considering 2 acres of undeveloped land in this area are going for 100K, with not nearly as nice of a view. Plus, you'd have to pay for elec, septic, water, grading, etc.
I was planning on paying $250,00-275,000 for a house anyway, so we are within budget. If my house in Kansas City would sell, I could buy the New Mexico house for CASH, then get a loan for the remodeling. Except that the house is still for sale.. will it sell tomorrow? next month? who knows.
But I LOVE the land, the possibilities of this lot and house. I've searched and searched, and nothing comes close! So am I crazy to think about putting an offer (less than $100K) on the house before mine sells? Will a bank loan me money? It kills me to think that if my house would only sell, I could buy the new place for cash . But then again, I own that one free and clear and don't pay a mortgage, so maybe this is fine?
I'm in an apartment now, and could stay here till the first house sells, not do any remodeling on the new one until then....thoughts & advice??? (I know I would have to get an inspection before closing any deals)
Don't sell the one you own outright; the market isn't good right now and you won't get what you want for it. Turn it over to a management company and rent it out. Since you don't have a mortgage on it, the rental income would be mostly profit. Just sit on it and rent it out until the market starts getting better, then think about selling it again.
You're trying to buy a house with a mortgage without a job? Mortgage companies look at debt to INCOME ratios. If you don't have income to offset the debts, doubtful that you'll get a loan. Have you found a new job yet? Then, it's a different story...
Don't sell the one you own outright; the market isn't good right now and you won't get what you want for it. Turn it over to a management company and rent it out. Since you don't have a mortgage on it, the rental income would be mostly profit. Just sit on it and rent it out until the market starts getting better, then think about selling it again.
Any idea how long it will be till the "market starts getting better"? Better enough to get more than today's price?
This is a big decision. Renting is not as straightforward as it sounds. How long will Nikky77 be an accidental landlord paying a long distance management company while trying to live a peaceful existence in NM?
I don't claim to know the answers, but rent-it-out-till-the-market-gets-better seems glib.
This is an unprecedented housing market. It could be quite a LONG time before prices return to boom levels.
If there are no other offers on the property offer 85-90k, If you have a job like what you did you should be able to get a loan, look at places you have done business with first. the PITI should be less than 600/ month so a $2400 month income should be able to deal with that. If it is the house for you be more creative if your conditions don't lend to the purchase...... the bank can always get a creative offer too... 90k with 5k down, 5.5% note amortized for 30 balloon in 5 yrs... There are many ways to skin this cat.
Any idea how long it will be till the "market starts getting better"? Better enough to get more than today's price?
This is a big decision. Renting is not as straightforward as it sounds. How long will Nikky77 be an accidental landlord paying a long distance management company while trying to live a peaceful existence in NM?
I don't claim to know the answers, but rent-it-out-till-the-market-gets-better seems glib.
This is an unprecedented housing market. It could be quite a LONG time before prices return to boom levels.
HE DOESN'T HAVE A MORTGAGE. Why would you sell in a highly depressed market when you don't have to? If he rents it out for a few years and the market still hasn't gone up, he can still sell it but he comes out a few years of rental income ahead of the ballgame. Use your head, man. An empty house with no mortgage is income waiting to happen, especially since all those greedy people who defaulted on their mortgages are going to need places to rent.
I have a final job interview tomorrow, chances are excellent I'll get it. I have no interest in renting out my former house, I want that money (when it sells) for remodeling of the new house I hope to buy. Plus I don't want the hassles of being a long-distance landlord, even if I pay someone else to do it. Too much bull*&5*.
I talked to a lender, they said if I get this job, there will be NO problem lending me money.
Actually, my worry now is the cost of remodeling, I'm thinking it's going to cost way more than 150K. I have another contractor taking a look today, to give me a ballpark figure. Not that I care too much, I can wait to do the remodeling...live in it as is (even if it's ugly and outdated) as long as it passes inspection and is safe to live in. What worries me more, an offer came in over the weekend for 90K!! Do you think I'm safe offering 95K? Or should I go higher? Remember, it's bank-owned, and is a 'fixer-upper'.
I have a final job interview tomorrow, chances are excellent I'll get it. I have no interest in renting out my former house, I want that money (when it sells) for remodeling of the new house I hope to buy. Plus I don't want the hassles of being a long-distance landlord, even if I pay someone else to do it. Too much bull*&5*.
I talked to a lender, they said if I get this job, there will be NO problem lending me money.
Actually, my worry now is the cost of remodeling, I'm thinking it's going to cost way more than 150K. I have another contractor taking a look today, to give me a ballpark figure. Not that I care too much, I can wait to do the remodeling...live in it as is (even if it's ugly and outdated) as long as it passes inspection and is safe to live in. What worries me more, an offer came in over the weekend for 90K!! Do you think I'm safe offering 95K? Or should I go higher? Remember, it's bank-owned, and is a 'fixer-upper'.
That's what I was going to say to do. Put an offer in on it 80-85K, then get the mortgage. Once your house sells, then start the remoldeling. Either way, you'll have to get a mortgage. I know I'd do it if I really wanted it. You don't heva mortgage now and as long as you get the job, you should be fine. You were planning on buying there anyhow, right? Good Luck!
What worries me more, an offer came in over the weekend for 90K!! Do you think I'm safe offering 95K? Or should I go higher? Remember, it's bank-owned, and is a 'fixer-upper'.
I'd be interested to hear what an agent would advise because it seems to me that you are in a blind bidding war now. I'm not sure if you will ever know what a 'safe' bid is in a situation like this. Plus in your original post you seemed to be very taken with the place. If the place is a real gem, then I tend to think that you probably aren't the only one who feels that way about the place and therefore the bidding could go up quite a bit. Never know.
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(I could use all advice)
(But I am only paying taxes and insurance, NO mortgage.)
will it sell tomorrow? next month? who knows.
. But then again, I own that one free and clear and don't pay a mortgage, so maybe this is fine? 
