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Robert Smith
  • New to Real Estate
  • Ooltewah, TN
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Advice Needed For My My Situation...

Robert Smith
  • New to Real Estate
  • Ooltewah, TN
Posted Jan 13 2024, 07:58

Hi all, 

I'm seeking some additional advice from those with financial & real estate knowledge regarding what to do with 2 properties I own due to my long-term goals.

My Long-Term Goal: Have no debt (including in my real estate portfolio), so that I can have more control and freedom when it comes to when and where I work. I also want to have at least 1-2 rental properties just to have some passive income in the real estate space. 

My Situation:
Currently, all my debt is paid off (i.e. credit cards, cars, etc.) except the 2 properties I own (1 primary residence (Property A), and the other is being rented (Property B)). When it comes to real estate investing, I have switched gears and have been leaning more toward the Dave Ramey approach of having my properties completely paid off due to my risk tolerance. 

Later this year I will soon be living in a non-US country and will be forced to look into remote work (to keep this post shorter, I won't get into details). 

The Properties

For my rental property, I've done most of the work thus far (rehab, repairs, tenant interviews, etc.) and have concerns about managing the property remotely since my contact list of reputable contractors is not complete (meaning I have a contact for any area of a home that may need to be repaired). I'm currently also looking into property management (PM) but have read those can be nightmares as well,  however, I'm actively starting to look just in case I need to go that route and there is a highly rated PM near my area. 

Once I move back to the US, I will likely never live in Property A again and have considered accelerating my long-term goal by selling Property A this year to completely pay off Property B (the rental). In short, Property A is larger and has a higher repair cost due to the high-quality materials than Property B, and in my opinion, Property A is not suitable to be a rental if you want to reduce the upkeep cost and turn around time for a new tenant.

Both properties are located in good locations (close to schools) and I have rented out Property A before but due to property damage from the tenants, and the high cost of materials and custom features of the home, we decided not to re-rent this property and make it our primary resident. Property B we have successfully rented several times (~5 different tenants) and the property is not as complex and has slightly lower quality (but reliable) materials used. 

My Question:
Keeping the information above in mind, what would you recommend I do? Should I hang on to both properties, sell both if I have little experience managing properties from another country, hire a property manager, sell property A to pay off property B but hang onto property B for passive income...etc.?

Thanks for taking the time to read this. I tried to edit it as much as possible to keep the initial post as short as possible

Properties Information:

Property A (primary residence
Loan Balance: $194k
Net Profit If Sold: $150k (from Zillow)
Built: 2002

Additional Info: Needs several small-medium costing repairs before I feel it is ready for a tenant again, and probably 1-2 large expenses that will occur within the next 3-5 years due to the age of the home and the last time they were replaced (i.e. roof, appliances, AC unit, etc.)

Property B (rental property) 
Monthly Gross Income: $1850
Monthly Net Income: $630

Loan Balance: $155k
Net Profit If Sold: $155k (from Zillow)
Built: 2002

Additional Info: Recently rehabbed and shouldn't have too many major capital expenses for the next 3-6 years.

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Mike Hern
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  • Scottsdale Austin Tuktoyaktuk
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Mike Hern
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  • Investor
  • Scottsdale Austin Tuktoyaktuk
Replied Jan 13 2024, 17:59
Quote from @Robert Smith:

Hi all, 

I'm seeking some additional advice from those with financial & real estate knowledge regarding what to do with 2 properties I own due to my long-term goals.

My Long-Term Goal: 

Planning long term goals is a great thing. But the response can't be fit into a single post. I suggest you buddy up with someone and go over options.

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Replied Jan 18 2024, 10:54

Robert, feel free to give me a call if you'd like to hear about a local, investor owned Management Company. I would be glad to share our perspective and offering. 

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Alecia Loveless
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Alecia Loveless
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Replied Jan 19 2024, 02:28

@Robert Smith If your tenants are destroying upscale features of your home then that’s a problem with that tenant and not necessarily a problem with all tenants.

If it were me I’d keep both homes and rent them both out to further increase my portfolio.

However if you’re debt averse and only you can decide how strongly you feel about this, then you should just sell property A and pay off property B.