Multiple-Property Deals
Need Good Coordination

Question: My fiance and I are trying to combine families and homes. I own a house and a condo that I am currently renting and she owns a house, as well. We found a house we like here in the South Bay, and have started to work with an agent that I'm not very confident in. I'm not sure, but I don't think she knows how to orchestrate a multiple-property deal. We need to get money out of the properties we own, and don't know what to sell or rent. In addition, the timing seems like it will be very critical if we want to keep from making double payments. Can you help us figure out how to make this happen as economically as possible?

Dan: What a great position to be in: owning two houses and a condo! There are really only two ways to get money out of your existing properties: selling or refinancing and renting them out. With property so valuable in the Bay Area -- though declining at the higher end recently -- renting out the properties may be a good choice. If that's the case, be sure to refinance the homes while you're still living in them. You'll get a better interest rate and a higher loan-to-value ratio than if they're already being used as rentals. Beware of "bridge" or "gap" loans, which are temporary, high-cost loans that will result in the double payments you don't want to make. Once you rent them out, the tenants should cover the mortgage load.

On the other hand, if you don't want to be a landlord, sell those properties and invest the money in your new home. Be careful to avoid capital-gains taxes. You can probably exclude up to $250,000 of gains per person if you've lived in the home two out of the past five years and consider it your principal residence. If you sell the condo, you'll probably owe some capital-gains tax because it's a rental property and your equity has probably increased. If the capital-gains tax isn't an issue, I'd probably get rid of the condo. Condos usually don't appreciate in value as quickly as single-family homes and are harder to rent because of homeowner's association restrictions.

Whichever way you go, act quickly. It will be difficult to purchase the new home until you have the money out of the old ones. I'm surprised your agent hasn't already tried to list your existing properties. You may need to switch to an agent who has more experience with multiple-property deals.

Where to Turn When You Can't Find a Buyer

Our house has been on the market for more than six months with no bites. We really need to relocate because of a job move. My husband is driving more than an hour each way to work. We have a contingent agreement on a home that we've found in that area, but can't seem to sell our house. We're willing to come way down with our price just to get out at this point. Do you know of any companies that will buy a house outright at a lower price, then resell to make a profit for themselves?

-- Fern, Michigan

Fern: The problem is that property in your neck of the woods isn't moving as quickly as it used to. While I don't know of any relocation companies in Michigan, you can find them by contacting some of the larger real-estate brokerages such as Coldwell Banker, Prudential and Century 21.

But beware of such arrangements. Most relocation programs only work by offering you much less than you're asking on the open market. After all, if a house isn't selling at the current price for you, why would it sell for someone else at the same price? You may be able to do better simply by cutting your price. You might also consider selling the property on your own -- or with one of the many discount brokers now advertising on the Internet -- and using the money saved on the commission to offer buyers a reduced price for a quick sale.

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-- Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Tips and Traps When Building Your Own Home," (McGraw-Hill, 2000).

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Dan, Silicon Valley

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