From: asylvain@felix.filenet.com (The Chipmunk)
Newsgroups: misc.invest.real-estate
Subject: Re: Help needed with Rental property
Date: 24 Jul 92 01:37:09 GMT
Reply-To: asylvain@fritz.filenet.com (The Chipmunk)
Organization: Foundation for the Increased Wealth of Chipmunks

Written in article <Brsv7J.FJE@apollo.hp.com>
 by daniels_d@apollo.HP.COM (Dave Daniels):

: I am looking for some help with my particular situation.
: I presently own a condo with a loan of 68,000 on it 

Seems your monthly payment ought to be in the $500 range, am I right?

Jees, and you can only rent it for $200?  (refering to $300 negative)
WOW!  (Or is it the HOA fees that are killing you?  That'll do it
sometimes!)

If your payment is MORE than $500/month, REFINANCE!  NOW!

: and there
: are currently several units within the same complex selling for
: 29,000 - 34,000. As you probably know the Condo market in New England
: is in a major slump

Condos ain't sellin' NOwhere!

: What I am thinking is, if we were to invest in another condo and financed
: 20,000 for 15 years,

If you are thinking about a condo as an investment, get a 30 year loan.
Always, always, always seek to keep your expenses at the barest minimum.

: we would be looking at about $350 a month including 
: taxes, and condo fees. We could then easily rent it for $600 a month with a 
: positive cash flow of $250 a month. The idea is, this would offset the other
: condo and we would have a much easier time recovering when the market picks 
: up (we hope). 

Arruughhmhmmm ... I dunno.  Banks don't go for one property offsetting
another one, not anymore.  The property has to stand on it's own "two
feet" so to speak.  You could tell 'em you're going to live in the first 
one and rent the second one.  They'll go for that.  You're allowed to
change your mind after escrow closes.

And indeed, you may want to consider doing just that.  How badly do you
want to get into a house anyway?  Clearly you can afford the original
condo, since you must have bought it for > $68k in the first place.  Just
live there and consider the costs to be nominal for living somewhere.
At least you can still write off the interest and tax portion of payments.

: When the market does pick-up :-) in 3-5 years we could sell both rental  
: properties and hopefully break even.

Sure, then you could get your house!  Probably even make a more than
modest profit.

: I am afraid if I don't do something and we purchase a house we well never 
: recover what we owe on the condo and we will get screwed.

Again ... how badly do you want a house?  If you can't sell now, and you
can't rent now, it may just be better to stay put.

Have you considered leasing?  There's been a bit of a thread on that
subject here recently.  In a nutshell, if you can find a buyer willing
to lease for 2 or 3 years, you should be able to negotiate a larger-
than-market-rent leasing agreement, applying that in effect to the down
payment.  That will help reduce the negative cash-flow situation.

-- 
The Chipmunk.
Opinions are mine, batteries not included, void where prohibited.
In America, any boy may become president and I suppose that's just one
of the risks he takes.  -- Adlai Stevenson