I'm kicking myself for taking out the 2nd mortgage, but we had some high-interest debts from college that I wanted to eliminate. Definitely didn't anticipate moving again so quickly, but here we are.
First, stop kicking yourself... not healthy and makes no positive difference.
Second, let me ask you how much were you paying monthly for that college debt?
Let's assume you rent the place and you have to cover extra $600 each month. If your college debt payments were $600 before then it is just like you had transfered the debt from one vehicle (college loan) to another one (second mortgage). I know, I know, that is an over-simplified way of looking at things, but this could give you a different perspective. If that is the case then you are not really 'losing money', you are making a different type of payments, probably at a lower rate than the college loan and longer amortization.
How does it look now from this other perspective?
Also, another way of making this loser a better property, you could create an LLC and transfer the property from your personal assets to that entity, and take the loses differently, but here you need a tax expert... hopefully Diane could visit this thread and provide her comments.
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