Young Newlyweds Need Advice
My husband and I just got married 6 months ago and need some expert advice! We purchased a pre-construction townhouse, which we are living in now. We also put a down on another pre-construction home that will be ready in Jan 05. (Both of these homes are not very central to where we work, so we are looking to buy an older home and fix it up that will be closer to our jobs and more centralized.) Because we have all of our money invested in these two homes, we were thinking of renting out our townhome until July 05, to avoid the capital gains tax (will make two years). Then rent out the home we will be getting in Jan for two years (getting an interest only mortage?) and purchasing an older home with an interest only mortage as well, so that we will have a low monthly payment since we have no money to put down at this time. We had this in mind because we understand that with an interest only loan we only pay the interest for either 2, 5, 10 years, etc. (is this correct?). By the end of two years we would have the money from the townhome and the other home we will be getting in Jan and either reinvest that money for about another 3 years in a pre-construction home or put it towards are new home. Does this sound like a good idea. In the end we are trying to pay off whatever home we will be living in.
Thanks!
SOUnds a little convoluted. You don't get the capital gains expemption unless you occupy the house as a primary residence. YOu can't occupy three..
IF you are in an appreciating market you might be able to get enough to make your plan work. Preconstruction generally only works well when house price is moving rapidly upwards like in Phoenix etc.
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