Browse Our Site:
Search Mortgage Library:
Types Of Mortgage Loans Mortgage Lender Directory  +  Mortgage Calculators  +  Mortgage (ARM) Indexes Mortgage Market Survey
+ Find The Best Mortgage + Ask A Mortgage Related Question  +  Articles And Publications  +  Mortgage Glossary + Search Mortgage Rates +
Credit Grade Guide Historical Mortgage Index Data  +  Historical Mortgage Rate Data  +  Home Interest Rate Trends

Condo Purchase

Mortgage Library: Ask a Mortgage Related Question: Answers: Condo Purchase

Question:

My son was sold a bill of goods and bought a 2/2 investment condo in Tampa, Fl. Rent is $930 month coming in. There are 2 mortgages. Approx 150,000 at 7.5% and approx 53,000 at 12.5%. Total mortgage payment is about 1,500 or so. Plus HOA and Taxes brings it up another 450 monthly. He received incentive money from the developer to help pay the difference between the rent and mortgage. Idea was to sell in 1 to 2 years and appreciate but due to market conditions, this will not happen in the near future. The incentive money will run out in 4 to 5 months. 

I'm thinking he needs to hold this condo at least 2 more years to get out from under. Im seeking advice as to how he can avoid a future foreclosure or request to sell short from lender.

Thanks for your reply,

M. S.
Tampa 
Florida

Answer:

Dear M,

By the figures you have given, the net loss is approximately $1000 per month. Depending on your son's income, he can offset a good portion of this loss with a depreciation schedule and a write off of the loss, both of which will reduce his income tax obligation. 

It is best to consult with your accountant to determine approximately how much this tax savings will be. Once the amount is determined, your son should go to his employer and request a change to his tax deductions, this will enable him to see more cash flow immediately.

Also, keep in mind that over time, rents and equity do increase and as long as the housing market continues to be depressed, there will be an increased demand for rentals.

There are a lot of opinions out there and as long as market conditions fluctuate, so do those opinions.

Except for the exaggerated flips that we all hear about, the most successful real estate investments are long term. Ten years from now, your son could only wish he was paying the same amount for a condo in the same area.

Your decision in this matter is relative to your present financial health and it is best to consider all options before making that decision.

Please call me if I can be of further assistance.

Vinnie D'Andraia
Net Mortgage Funding LLC
727-865-3595 office
866-365-5100 toll free
877-559-7200 fax
info 'at' netmortgagefunding.com email
www.netmortgagefunding.com
  website


Mortgage Lender Directory + Find The Best Mortgage + Search Mortgage Rates


Mortgage-Related Questions Answered


Mortgage professionals are welcome to participate!
Home  +  About Us  +  Contact Us  +  Disclaimer  +  Privacy Policy
Mortgage-X is an independent information service and is not affiliated with any lending institution.
Copyright 1998-2013 Mortgage-X.com
All Rights Reserved