Tuesday, April 3, 2012

The New Plan: Get a Mortgage on a New Home. Rent Out Condo!

As many of you know who have read this blog since the start I paid about 84,000 dollars for a 1 bedroom condo that is now worth about 30,000 in the economically depressed Michigan Market.

Luckily my month payment on the 84,0000 (I put 20% down) even with a 6.5% interest rate is roughly equal to what month rents are in my area.

I found a renter who wants to sign a 2-year lease on my condo.

I have also found 3 bedroom houses for sale for $60,000 that at one time were selling for 120-150,000 dollars.

The new plan is to get a mortgage for one of these new places and let the renter rent my old condo at a "break even" rate. I am going in to sign the application papers today for a mortgage.

I will let you know how this fiasco works out.


Jim Brown said...

How did it go??? I want to do the same thing. Did the bank give you the new mortgage???? Please let us know. Thank you.

Chris said...

I could not qualify on the second mortgage because my DTI ratio was a little bit too high.

When you added up my current mortgage, car payment, and credit card debt, there was just not enough room left to add another mortgage and still fall under the DTI ratio guidlines.

My income is about to double in 1 year so I will be buying a new house next year hopefully.

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