Pls help with suggestions for southern Cal real estate situation (LONG)

**socalguy92505** · 11-12-2010, 03:32 PM

I'll try to be succinct but ANY help would be appreciated!
In Nov 2008 my wife and I sold our home of 16 years in Santa Clarita, Ca to move to Riverside due to a job offer she had. I work at home.
We purchased a beautiful foreclosure (an oxymoron but true) for $455k with $94k down.
Our mortgage is currently at approx $354k. Our mortgage/tax/ins payment is $2670/month at 5.125%

6 months after our move my wife lost her job. Thankfully, 1 month later she had another offer with former colleagues for an exec position with another company that is located in San Diego. Since then (May 2009) we have had an apt rental in SD that she lives in from Mon-Fri. We spend weekends together up in Riverside or down there but it is beginning to take a toll on both of us. The rental on the apt is $1050/month

While I'd like to see us list our house in the spring of 2011 at $500k, based on comps, Zillow and the one or two recent sales in our gated community I'm assuming we could list our house at $450-$460 so after broker fees etc, I would guess we'd net about $400k or so.

With home prices in SD in the $600k's for something we'd even consider, I'd want a 20% down. Obviously based on the above, we would not have that.

My question after all this is: Based on this situation, and the assumption that our home in Riverside will not increase anytime soon, would the consensus be to sell, take what we can and maybe rent in SD? Or would it make sense to hire a mgmt company, rent our Riverside home and rent another in SD?

We have been homeowners for almost 20 years, have excellent FICO scores (very high 700's to low 800's) and need to be living together again. I'm having a hard time reconciling to becoming a renter again even if I'm breaking even on everything. I just can't see our house in Riverside appreciating any time soon and of course if it does, San Diego also goes up as well.

Thanks for taking the time to wade through this.

Edit: I am opposed to purchasing with less than 20% due to PMI. Also, with property taxes as they are, I'd hope to have the mortgage as low as possible.

**Greg** · 11-13-2010, 10:18 AM

Can you afford to rent out your house or sell it and buy with less than 20% down? It may not be optimal but at least you won't be renting.

In your situation you are going to have to compromise somewhere.

**socalguy92505** · 11-13-2010, 08:23 PM

Originally Posted by Greg

Can you afford to rent out your house or sell it and buy with less than 20% down? It may not be optimal but at least you won't be renting.

In your situation you are going to have to compromise somewhere.

Greg, thank you.
We could afford to buy with less than 20% down but as I mentioned, I'm reluctant to pay PMI. And while we could afford it, I'd sure hope to keep the mortgage as low as possible since the property taxes would be huge. As for compromise, we actually discussed this at length today and have pretty much decided that come spring, we'll list the house but are figuring that we won't get what we want. If that does turn out to be the case, we are going to hire a mgmt company to rent our home out and then we will rent one in San Diego. I think we'd break even or even be ahead a few hundred/month.

I'm just trying to get my head wrapped around the idea of being a renter again!

**socalguy92505** · 11-15-2010, 10:30 AM

Originally Posted by tjsuccess

what happens if the tenants dont pay? can you afford to make the payments in the worst case scenario you end up with a tenant that doesn't pay for months?

It is expected that house prices are going to dive again in the spring, so if you are going to sell now is the time. Certainly any PMI would be less than carrying a whole extra house payment no?

Well, it obviously would not be a situation we'd want but yes, in a crunch we'd be able to cover both. We had planned on using a mgmt firm to screen possible renters and of course would want to see very good FICO scores.

As for selling now, would'nt you agree that even in the best of times, listing a house going into the holidays is a horrible time. And with the market as it is in our area it would be worse. It really seems like a poor time. Another issue of course is that if we sell now and get very little return, we're looking at cap gains if we don't purchase in 24 months unless I'm mistaken.