RichPugh

This isn't a "What's it worth" post. I'm in the process of doing some hardcore debt reduction and I own a rental property that I'm currently losing $1000/month owning. Long story short, I paid a lot in 2004 and refinanced for even more in 2006, lived in it for 6 years, decided to move out to save some money and then I lost my homestead tax credit and the property taxes went from $2500/yr to $7500/yr AND the rents in the area (for a place laid out such as mine) really max out around $2k and my mortgage PITI is close to $3k. If I can reduce the principal enough to qualify for a refinance, I can stop bleeding $1000/mo while keeping it a rental OR I can most likely sell it and re-coop some of the cash back.

96 C4 6 Speed Coupes are fairly rare...
Iris Blue is fairly desirable...
Sport Seats and full leather option are pretty desirable...
High miles but meticulously maintained and improved/upgraded...
Subtly modded with all stock equipment avail with...
3 sets of wheels to go with...

I'm convinced I could get pretty good money for it.

I don't WANT to sell it but if I could pay down my mortgage by what I believe I could net from its sale, I could realize $1000/mo in real saving which could easily buy another 993... or ANY car I would drive, realistically.

Dare I loose the 1 car I've loved since before I owned it? Being an adult is crap, lol. Someone give me their $.02.

-Rich

Matteoagu

Very prudent and financially responsible move. You should be able to hop back into another 993 once the operation "reduce debt" is successfully completed. GLWS!

pirahna

Sell it, you can always buy another later. Losing debt is always a good thing in my mind.

goofballdeluxe

Damn, your car looks good.

I'll be the contrarian that will tell you your 993 is an appreciating asset, so if you can store it and keep it, it might be worth more in the long run and cost you little (if you store it or use it very little). It'll be harder to replace in the future should that be the case.

That said, debt sucks. I was in debt once in my 20s and it was a life and money drain. Even better than owning a 993 is being debt-free, so I can see your POV on this.

Good luck either way; you sound like you have your priorities straight

AZ Targa

I would sell the house unless it's something you really want to move back into in the future.


How do you have money problems aren't you Rich?

I couldn't help it....

993Mpls

My two cents:

1) Head: run the numbers and determine if the proceeds from the sale really would reduce your mortgage enough to make the rental cash flow work out to the tune of $1,000 / mo.

2) Heart: keep the thing that makes you happy. Keep the car, sell the rental. Life is short.

e9stibi

I would look at the economics of selling the house. It is at least another option to consider.

RichPugh

I wish it were that easy. The house is going to require a special buyer. It would probably appraise around $320k and we recently had it listed for sale at like $314k (with some messy tenants in there) with no positive feedback, LOL It's a wonky layout with less-than-norm finishes. It's very "Bohemian"... quite eccentric. Check it out...

http://www.zillow.com/homes/1243-bat...tClaimGA=false

Property location wise, its wonderful. To consider it as a place to retire is silly though because I honestly hate Baltimore weather. I'm retiring in Boulder, CO... haha. I would LOVE to sell it... I'd take a huge hit to save myself $1000/mo for the foreseeable future. Problem is, I owe $306k and there is no equity in it to qualify to refinance. I was tempted to sell the 993, give my mother the 20% to put down and sell it to her at $306k... (if I couldn't refi after paying it down). The new mortgage would be just over $1800/mo so it would then be a $100/mo positive carry and I'd only owe $245k so selling it at anything over that would go back towards another 993 AND I'd still be saving that $1000/mo.

I've been thinking of every scenario and option, haha.

Oh, if it only worked that way, LOL.

Juha G

Just some thoughts...

When you say you "loose" $1000/month, that can't really be true, can it?
It would mean the house is wash and every dime you throw at it is wasted.
What you loose is what you pay in interest for the mortgage and your taxes etc. costs. All those combined, is it more than what you get paid by the tenants? If it is, then yes, you are loosing the difference.
If those costs are less than the rent, every cent difference is adding to the equity, which means you are winning, not loosing.

Don't know how the housing market is right now but I think at this point it is irrelevant since you have a mortgage already. Maybe if you knew the house is going to decrease in value in the future, then you'd be better off selling it for what you get right now and coughing up that difference between your mortgage and the sales price by selling your 993.

You need to make some calculations, different scenarios and then make up your mind.

Good luck!

AZ Targa

Its a nice little house, too bad that you're not living there, I would have said to do a minimal renovation to freshen things up for a sale. The only downside I can see from the home (in relation to the area) is that its a little older inside, you could try to declutter and change the colors for a more modern look. Watch some HGTV and you'll think you can do anything. haha

I wouldn't sell the car though, I always have sellers remorse when selling a car!

BobbyT

Considering the loan balance and estimated asking price, as you pointed out, you have no equity. Will the lender consider a "deed in lieu of foreclosure"? This might save you from further bloodshed and avoid a black mark on your credit record...

earossi

Rich,

I hate to say it, but keeping that home is throwing good money after bad. You paid $340K for it in 2005, and today it sounds like you would be lucky to get $300K for it. When you say that there is zero equity in the home, you are boxed in. Refinancing the property with the proceeds from selling your 993 is sort of like moving the deck chairs around on the Titanic. In the end, the property is what it is......and economic times are not going to get any better.

Lastly, given the dismal geopolitical storm that is currently hitting our country, I am fully expecting that tax "loop holes" such as mortgage interest and property tax write-offs may become collateral damage in the war of progressives that is underway.

So, you are underwater on this property. Retaining ownership will just put you further underwater, while at the same time sacrificing your 993. And, if your financial lode stone continues, my guess is that it would be difficult for you to justify another 993.

My suggestion is that you figure out a way to give the bank ownership of the property, so that you can walk away. And, retain ownership of your car. Easier said then done. That is my 2 cents.

Jjm4life

What's your situation on your primary residence? I'm with the "Walk away from the house, keep the car" camp.

More pics of said 993 too please

earossi

Delete. Duplicate posting.

12mpg

Rich,

Talk to your accountant. I am in a similar situation with the a townhouse. I pay out of pocket each money for the difference between the rent and the mortgage, taxes, and assessment. My accountant assures me that when the place is sold, I can write off the losses. With annual depreciation on a rental property, he says I am actually doing OK. That being said, I would take a deed in lieu of foreclosure or a foreclosure before I sold my 993.