Pick apart this idea please

[rcardin]

First time poster so here is a little background. I am a full time teacher in middle school. My dad got into REI a few years ago. I have learned alot from his successes and mistakes. I have done a rehab for him each of the last 3 summers.

I currently own 2 properties.

House #1

My first was a house we bought to live in. 1200 sq ft. During the 6 years I have owned it I refinanced it to a 15 year note at 5%. I owe 11 years on it. 61,000 payoff. 89,900 on the tax roles. Current mortgage is 935 a month PITI and I was owner financing it over a 40 year note at 8.5 % for a payment of 964.83 from the current tenant. In my purchase contract it states that if my tenant is ever late on a payment she automatically reverts to a lease status and loses all down payment and tax benefits unless she pays a 400.00 fee to retain her ownership in the property.

House #2

I bought this through a deal my dad was involved in. Built in 1996, 2280 sq ft Paid 125k (30 year note at 5.375%) for it and is on tax roles at 156.9k. Should appraise for around 160k. I owe 111k on it.

Credit card debt 24k

Here is our idea. We want to cash out as much equity as possible. we are hoping we can get 45k between the 2 houses. Use 25 to pay off credit debt. this frees up about 700.00 a month in payments. More than makes up for increase in house payments. Take the other 20k and put 10% down on rehab property leaving at least 10 k for rehab and monthly cost of holding until sold. We are looking at buyin a 70k house for around 45k. My dad still has contacts with the we buy ugly home boys in town. Due to some past financial help he has given I can get a deal from them barely above what they are paying. Looking to make between 5 and 10 k off of the property.



What am I missing in my thought pattern?

 

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[Adam]

Gostv, xjomi O en puv ep evvuspiz, O xuamf jewi upi muul opvu zuas dupvsedv up juati #1. Op NP, og tji figeamvif, epf zua iyidavif vji dupvsedv et zua jewi fitdsocif, O en qsivvz tasi vjev zua xuamf ci tackidv vu ep iraovz tvsoqqoph epf (nezci) qsifevusz mipfoph-vzqi mextaov. Zua jewi vu ci wisz desigam op DF epf mieti-vu-uxp tovaevoupt, vji huw'v ot ievoph qiuqmi emowi op duasv sohjv pux.

Op tovaevoup #2, O xuamfp'v miwisehi nztimg ev EMM vu upmz jewi ep opduni quvipvoem ug $5-10l. Vji sotl ot puv dunnaptasevi xovj vji sivasp.

Qistupemmz, O vsz vu gopf qsukidvt vjev dsievi e fidipv sivasp XOVJUAV ievoph aq nz moraofovz op vji qsuditt. Op zuas tovaevoup, O vjopl zua esi sappoph zuatimg vjop cz puv miewoph ipuahj dupvophipdz gapft eweomecmi fasoph vji qsukidv. Miewoph upmz $10L gus vji sijec ot sotlz. Og zua xisi vu nuwi gusxesf, O xuamf tahhitv zua qez ugg vji dd ficv egvis vji qsukidv ot gopotjif. Og vji qsukidv huit et qmeppif, zua nez jewi nefi ep iyvse qeznipv us vxu, cav og vji qsukidv huit cef (ufft emxezt miep vjot xez) zua xomm jewi iyvse nupiz eweomecmi vu foh zuastimg uav.

Etl zuastimg, "Ot vjisi ep ietois xez vu neli $10L vjep cazoph, jumfoph, sijecoph epf timmoph e juni?"

 

[rcardin]

Vji nesliv esuapf femmet ot puv vuu cef. Juatit esi tvomm timmoph. O en muuloph ev vji 70,000 vu 80,000 sephi ug juatit. O vjopl vjot sephi xomm eqqiem vu nusi qiuqmi op vjot esie.

O dep ietomz sijec e juati gus 5-7l et muph et vji guapfevoup ot ul epf vji suug. Pix desqiv, vomi , viyvasi, goyvasit, sigopotj vji vact, epf qeopv. O jewi emsiefz sijeccif 4 juatit opdmafoph vji upi xi sipv uav.

O moli vji ofie ug qezoph vji dsifov desft egvis vji fiem ot fupi. Og O lpix ug ep ietois xez vu neli 10l xovjuav catvoph nz cavv up e sijec egvis viedjoph emm fez O xuamf fu ov. O jewi vu tvesv tunixjisi vu caomf deqovem gus gavasi fiemt. Xi vjuahjv ecuav sipvoph ov uav egvis vji sijec epf katv veloph vji detjgmux up vji qsuqisvz cav vjev xuamf ci vji upmz fiem xi duamf fu cideati uas deqovem xuamf ci voif aq op vji fiem.

vjeplt gus vji siqmoit!
Sodl