Hey everybody -
My wife and I have a real estate conundrum that is weighing somewhat heavily on us and I'm posting this in hopes that someone will have some advice or an idea that will allow us to resolve the situation. Here's the deal:
We currently own two houses: the house that we are living in and also a townhouse nearby. We lived in the townhouse up until about one year ago when our current house came on the market. It was everything we wanted in a house and we needed more room so we put an offer on it, bought it and moved into it within one month. In order to make things happen quickly we decided not to put the townhouse on the market immediately and instead refinanced the mortgage on it into a one year balloon (with no monthly payments). Our thinking was that this would allow us to take some time to fix the townhouse up and then, once all the work was done, sell it at a better price.
We got the townhouse fixed up and on the market within a few months and it has just sat there since then. We had a couple of people come look at it but never got any offers on it. I think a combination of the falling housing market and the rising mortgage balance (and therefore the selling price) just put our asking price too high.
So a couple of months ago we figured if we couldn't sell it we might try to keep it as a rental. The numbers work but just barely - we'd be able to refinance on a 5 year ARM (interest only payment) and we think we could get enough in rent to break even each month after the mortgage payment, maintenance, etc. This continues to be our current plan, but the main problem is that even if we get a renter to pay what we need in rent we would still only be postponing the problem (i.e., the mortgage balance is not being paid down and so we would still probably have trouble selling it for the foreseeable future).
So my question is this: Does anyone know of anything else we could be doing to solve the problem? The only part of the solution that I care about it getting the impending mortgage payment off of my shoulders. I'll sell it, I'll rent it, I'll do whatever (well, short of burning it down). I'd even give it away if that would take care of the mortgage. In the words of Robert Allen, I'm a serious don't-wanter. The balloon note is due at the beginning of June so we've got about a month and a half now. Any thoughts?
P.S. Wow, long post. Thanks for reading
