Buying a house(Calif.) Should I sell my home, use that as a downpayment, or rent, & use that as partial pmt?

Question

Here's the deal:
I want to eventually get into owning rentals, but I don't make much $$$, so it may not be realistic.
I own a mobile home on land, worth about $80K.
Should I sell, & use that $$$ as a large downpayment on a home, or scrape together what will be a small downpayment, and rent this place out, applying the rent money to my new morgage?
I could probably get around $800+ rent.
I will not have much of a downpayment if I do this (probably $10K), and I want to get a very small, and/or serious fixer, so it will be as cheap as possible.
I'm not doing this so I can have a nice big house or whatever, just to try to get into property that will appreciate faster than a mobile home, plus like I said, get into rentals eventually, one at a time.
thanks!

Answer 1

You are not going to get much of a house in California with 10K down payment.

Now is not the time to buy. Sit tight, and wait for the foreclosures to start stacking up.

Answer 2

I've gone thru a similar situation and have had years to analyze my actions. I know hindsight is 20-20 but maybe my experience can help you.

Here's a summary of my story. My fiance and I owned a condo worth about $220K 5 or 6 years ago. We had $80K in equity so we sold it and used the entire $80K as a downpayment on our present home. In the next 3 years that same condo was re-sold for $400K. At the time, we discused the possibility of renting it out instead on selling it but I didn't want to be bothered. I now know better and presently own several rentals. You can probably predict what I am about to say.

Conceptually, I think you should keep the trailer and rent it out. But let's get into the details a bit.

The $800/month rent is a decent return on an $80K investment. After expenses and taxes, the return is 9 to 10%. Not bad. The additional cost for a low down payment loan for a typical house in California won't cost that much so you should be ahead of the game.

I think you do have some problems though. $10K is not enough to buy even a fixer in california. $90K is more like it. You're on the right path but you need a more cash. You may be able to borrow against the trailer for temporary funds but it will drastically effect your bottom line.

The fixer market is very very difficult especially in California. I've been looking for such a deal for years and have been close but thus far unsuccessful. It is very difficult to implement a business plan in such an environment let alone living in there.

As you know, trailers appreciate much slower than single-family homes. However, in this market, I wouldn't count on much for any property.

Good luck!

Answer 3

Now IS the time to buy! The foreclosures are/have been stacking up. You can even buy a brand new home from a builder at great prices! If you don't make much money then you should not keep the m.home. You have to think about if it were to become vacant and you can't re-rent it. Would you be able to cover both places? You better have at least 5 months in reserves for such occurrences. Anytime you can hold on to real estate. DO, it's the best investment ever.

Answer 4

Sell and use the money to buy property in California. The worst thing that can happen is that you just come out even should you decide to sell it later. California is one of the few places on earth where land property value does not depreciate. Your selling price will always be higher than what you bought it for.

Answer 5

1. Sell the mobile home.
2. Use the proceeds to buy a new home.
3. Mobile homes drop in value.
4. Homes appreciate.
5. If you're in Southern California, I'd be happy to help you! [e-mail]

Answer 6

in case you and your husband artwork finished time and don't have the time to guard each of the subjects the abode would have with the hot renters, value extremely much less hire and have them conform to fixing something which will reason issues. you will in all risk finally end up determining to purchase new stuff interior the long-term if there is not any scientific care to them, yet renting is a huge problem, on the different hand the hire $ is likewise good.

Answer 7

buy the fixer, a rental does nothing for you but drain your money so later on, you cant afford to buy a house of your own.