I absolutely understand your concern about the relative loss in value for your primary home. Since I live on Pompano Beach we have experienced the same thing. The reason I say relative is that your home may have lost $100K in value but so has similar real estate in FTL so the playing field is even so to speak.

As such, you must look at the personal goal you have with regard to buying another property. If you plan to rent your current home in Pompano be aware of the rules pertaining to homestead deductions you may have. This may be simple economics where staying in the home with the highest value/taxzation rate and having the homestead exemption may give the biggest bang for the buck with regard to taxation.

The second factor is if its worth it to rent out either property with the idea to cash flow it. From what I see, in the rental market buying something in the 90-$130K range with at least 25-30% down gives you a break even position on the rental looking at real carrying costs such as yearly taxes broken down on a monthly basis, monthly maintenance fees if there are any, and finally the mortgage payment plus insurance. The best scenario would be if your current home is paid for so that the cash flow from its rental income really exceeds expenses and the resulting income is greater than what you could earn on that money if it was in the bank in percentage terms. 2% or 3% is not a real return on investment. Also be aware that if you are looking at appreciation as part of your investment return, that is only applicable if you take a long term view, such is the current economy.

I know this is a lot to look at, but any investor will make it their priority to know ALL the info before jumping into the real estate market as its just like playing the stock market, you gotta know what your truly investing in. Much luck!

Perhaps an exchange would be suited for your situation as well as others who have lost equity value.

Anything is possible but you obviously need to look at your financial situation carefully first. Angela gives great advise.

Let me know if you want to sit down to discuss some possibilities.

Adam Ehlmann
Florida Elite Homes
954-980-7120

Good morning!

This isn't really a real estate question - it's more of a financial issue.

I would honestly recommend that you sit down with your financial advisor to review your situation. The answer to your question will depend on the exact details of your unique financial circumstances. Depending on what your Pompano Beach property is worth, and how much you owe, you may be better served by seeking a short sale for that property. Or, it is possible that the rent that you could receive on the home would (or would not) cover a reasonable percentage of the maintenance cost on that house. If your payments on that home are $2500/month, and reasonable rent in that area is only $1500, you'd have to decide if you could bear the loss of $1000/month, etc.

Only your financial adviser can tell you if you can afford the payment of 2 mortgages, plus 2 insurance bills, plus 2 taxes etc., or whether your going to wind up with a 2nd investment that's not going to work out the way you had anticipated.

Is it adviseable to purchase a 2nd home when your 1st home is upside-down? Maybe for some people, but not for everyone. It is not immediately apparent to me what you would gain from taking an investment that didn't do well and turning it into a rental, unless by renting it, you were able to cover all of your costs (which is questionable).

As part of that process, if I can help you evaluate the short sale value of your Pompano Beach home and identify some new properties that might fit your strategy, please do not hesitate to let me know - I'd be delighted to work with you. I would recommend that you sit down with your financial advisor first.

Best of luck,

Angela
Villa G Realty, Inc.
Tel: 954-816-7996

Yes you can do this but you must qualify for both mortgage payments if that is possible. Even if you did rent out your primary most lenders will require 2 years tax returns for you to count the income. So unless you can qualify for two mortgage payments then No. Keep in mind that both mortgage payments principal, interest tax and insurance should be around 35% of your Gross monthly income.

Dear Jlow302:

There are other factors involved that would determine whether that would be advisable to you.

Some factors to consider would be as follows:

1) Tax ramifications (check with your tax advisor);
2) How long have you lived in Pompano and what is your save our homes value that would be portable to your new home;
3) Home much money do you have to put down as 2nd homes are rather difficult to get finances right now, or will this be an all cash purchase;
4) How does your income look? Are you self employed? Provable paycheck income; Or again, will this be an all cash purchase

There are many more factors that I would be happy to discuss with you via email, lmbrealtycorp@aol.com, or by phone (954) 868-1416.

Should you desire to search for properties in the meantime, please visit my webpage at http://www.AllianceRealtyFlorida.com.

I look forward to speaking with you,

Lisa M. Brodeur
LMB Realty Corp d/b/a Alliance Realty
lmbrealtycorp@aol.com
(954) 868-1416

Many people are doing just that!
I will be happy to help you with your realestate needs.
This is the best time to buy!