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WhatNow
Say Cheese!
Member since 1/06 8033 total posts
Name:
A (formerly WhatNow?)
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Financial gurus, and especially those knowledgeable about real estate, please come in!
I am trying too research something, but I don't even know where to start. Here is what I am trying to find out:
If one owns real estate and the mortgage is fully paid off, what can one do to get cash out of that apartment without actually selling it? Borrowing money against the first place? Basically, if one is trying to get money to buy more real estate without sellign the first place, is there anything one can do and how financially smart would that be?
I hope there is someone here who even understands what I am talking about, because frankly, I am not even sure myself... 
Message edited 9/16/2013 5:15:21 PM.
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Posted 9/15/13 10:53 PM  |
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jellybean78
:)
Member since 8/06 13103 total posts
Name:
Mommy
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Financial gurus, and especial those knowledgeable about real estate, please come in!
I understand what you are saying since we are in that position. We have a fully paid for apartment that we can refinance and take cash out from. We thought about going this route to invest in a house and just had to go to the bank and get approved. We ended up not doing it though but basically it's just like a refinance although technically the property is no longer financed.
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| Posted 9/15/13 11:10 PM |
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Paramount
Sweet!
Member since 7/12 4287 total posts
Name:
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Re: Financial gurus, and especial those knowledgeable about real estate, please come in!
Are you talking about a home equity loan? You use the value of your dwelling to borrow money. if you don't pay it back you loose the house...the bank can sell your house to get back the money you owe.
http://en.wikipedia.org/wiki/Home_equity_loan
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| Posted 9/15/13 11:14 PM |
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-Lisa-
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Member since 5/05 6530 total posts
Name:
Lisa
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Re: Financial gurus, and especial those knowledgeable about real estate, please come in!
you would take out a mortgage or home equity loan against the first property.
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| Posted 9/15/13 11:19 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Financial gurus, and especial those knowledgeable about real estate, please come in!
the only way I see this being worth it is if you need all cash to buy the next house
otherwise I would just take a mortgage on the second property
I am not a huge fan of putting up my primary residence to by a rental
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| Posted 9/16/13 12:45 PM |
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WhatNow
Say Cheese!
Member since 1/06 8033 total posts
Name:
A (formerly WhatNow?)
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Re: Financial gurus, and especial those knowledgeable about real estate, please come in!
Thank you, everyone!!! I know it would not have been ideal to go ahead with the plan if i just wanted to buy a rental place for extra income, but it's more complicated than that.
Basically, the place officially belongs to my husband but someone is living there now, as per will of the person who left it to him. So, it is definitely not our primary residence. We are trying to find out how to make the apartment financially work for us without selling it and leaving the person who lives there now homeless. My feeling is that it can be turned into money to buy a suitable place of our own or to use it for college payment for our kids down the line. Complicated story, isn't it...
Message edited 9/16/2013 2:16:17 PM.
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| Posted 9/16/13 2:15 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Financial gurus, and especial those knowledgeable about real estate, please come in!
so you want to cash out this apartment and buy a house?
that I would do
I guess selling it isn't an option b/c you want this person to keep living there?
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| Posted 9/16/13 2:24 PM |
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Bridex100
Two Under Two Mommy
Member since 3/08 10420 total posts
Name:
Momx100
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Re: Financial gurus, and especial those knowledgeable about real estate, please come in!
Posted by WhatNow
Thank you, everyone!!! I know it would not have been ideal to go ahead with the plan if i just wanted to buy a rental place for extra income, but it's more complicated than that.
Basically, the place officially belongs to my husband but someone is living there now, as per will of the person who left it to him. So, it is definitely not our primary residence. We are trying to find out how to make the apartment financially work for us without selling it and leaving the person who lives there now homeless. My feeling is that it can be turned into money to buy a suitable place of our own or to use it for college payment for our kids down the line. Complicated story, isn't it...
Does the person who lives there now pay rent?
Who is responsible for repairs and maintenance and who pays for real estate taxes if the property is under your husband's name?
I work in real estate investments and you could finance the property and pull equity out. You would just need to start paying the mortgage (on your own or with the rent collected by the tenant).
Message edited 9/16/2013 3:21:31 PM.
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| Posted 9/16/13 3:19 PM |
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Pumpkin1
LIF Adult
Member since 12/05 3715 total posts
Name:
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Financial gurus, and especial those knowledgeable about real estate, please come in!
Does the person living there has a "life estate" in the property?
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| Posted 9/16/13 3:39 PM |
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WhatNow
Say Cheese!
Member since 1/06 8033 total posts
Name:
A (formerly WhatNow?)
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Re: Financial gurus, and especial those knowledgeable about real estate, please come in!
Posted by Bridex100
Posted by WhatNow
Thank you, everyone!!! I know it would not have been ideal to go ahead with the plan if i just wanted to buy a rental place for extra income, but it's more complicated than that.
Basically, the place officially belongs to my husband but someone is living there now, as per will of the person who left it to him. So, it is definitely not our primary residence. We are trying to find out how to make the apartment financially work for us without selling it and leaving the person who lives there now homeless. My feeling is that it can be turned into money to buy a suitable place of our own or to use it for college payment for our kids down the line. Complicated story, isn't it...
Does the person who lives there now pay rent?
Who is responsible for repairs and maintenance and who pays for real estate taxes if the property is under your husband's name?
I work in real estate investments and you could finance the property and pull equity out. You would just need to start paying the mortgage (on your own or with the rent collected by the tenant).
The mortgage is completely paid out. The maintenance, taxes and utilities are paid by the person living there now, but that person does NOT pay rent.
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| Posted 9/16/13 5:13 PM |
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WhatNow
Say Cheese!
Member since 1/06 8033 total posts
Name:
A (formerly WhatNow?)
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Re: Financial gurus, and especial those knowledgeable about real estate, please come in!
Posted by Beth
so you want to cash out this apartment and buy a house?
Something like that... How would one go about doing THAT? 
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| Posted 9/16/13 5:14 PM |
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Bridex100
Two Under Two Mommy
Member since 3/08 10420 total posts
Name:
Momx100
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Re: Financial gurus, and especially those knowledgeable about real estate, please come in!
Posted by WhatNow
Posted by Beth
so you want to cash out this apartment and buy a house?
Something like that... How would one go about doing THAT?
You will need to apply for a mortgage. The bank will give you the funds and you will need to pay it back. That is how you cash out.
Let's say the apartment is worth $500k. You want to "cash out" $300k. The bank gives you $300k cash and you get a mortgage for $300k.
The mortgage you assume will affect your debt to income ratio and that will play a role in the future home you plan to by for yourself.
I would make sure that you are comfortable with paying for both mortgages (apt and you future home) you will be paying for. That is how people get into trouble. When real estate markets were robust, people would pull equity out of a house to buy another house and eventually would not be able to pay for all the mortgage payments that were due.
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| Posted 9/16/13 6:02 PM |
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