Thursday, September 16, 2010

Sell or refinance, what would put me in a better financial situation? I am a stay at home mom?

Vacant Rental Property -

My sf rental home in Los Angeles is currently vacant. I have been told that it is worth about $380,000. I owe about $75,000 on the first. I recently took out a HELC, $180,000. I used about $35,000 to payoff some bills and to do some work on the property. My total indebtedness on this property is about $105,000.



Now that this house is vacant, I must pay about $1,080 per month to carry the property. My husband and I cannot afford to make this payment without the rental income. I am a stay at home mom.



What should I do?

Would I be better off selling the property and reinvesting in multi-family property? A friend just purchased a duplex in Ohio for $49,000 cash. His gross rental income is $900 per month.



Or should I refinance, taking some money out to invest in multi-family property.



Are there tax implications of not having interest payments to write-off? Is it to my advantage to have free and clear property?



Thank you in advance for your help.