Sell Home To Reinvest?

7 Replies

Hello I bought my first house a few years ago. It has almost doubled in value (recent appraisal) due to updates and the market overtime. My overall goal is to get cash flow to leave my w-2 job one day. At first when I was looking into real estate investing I thought take a HELOC out and use as a down payment and rent out my primary residence and start working on another property. (I am not super handy I would have to contract some things out). Then I looked at how much my house has risen and now am leaning toward selling.

If I sell I could reinvest the cash into another rent ready home and still have funds leftover for the next project. The pro I see is that I would not be using borrowed money (the HELOC) for the 2nd property but my own money.


Real estate I have been working a little on the side to learn the buisness but 95 percent of my income is from my w-2 job. I have learned a lot and cash flow is my goal. I feel I should sell and wait for an opportunity or deal that fits because the market is high right now.

Originally posted by @Gunnar Linden :

Hello I bought my first house a few years ago. It has almost doubled in value (recent appraisal) due to updates and the market overtime. My overall goal is to get cash flow to leave my w-2 job one day. At first when I was looking into real estate investing I thought take a HELOC out and use as a down payment and rent out my primary residence and start working on another property. (I am not super handy I would have to contract some things out). Then I looked at how much my house has risen and now am leaning toward selling.

If I sell I could reinvest the cash into another rent ready home and still have funds leftover for the next project. The pro I see is that I would not be using borrowed money (the HELOC) for the 2nd property but my own money.

Real estate I have been working a little on the side to learn the buisness but 95 percent of my income is from my w-2 job. I have learned a lot and cash flow is my goal. I feel I should sell and wait for an opportunity or deal that fits because the market is high right now.

Hello Gunnar,

I am working with a family right now in a similar situation here in Queens, NY. The family has built a ton of equity into their first property and are looking to sell or refinance to get into their next investment property.

My advice to you is the same I gave to them:

- Find out your payoff/payout amount for your current property.

- Set up meetings with a lender and a realtor in your market so that you can have all your options laid out for you. Interests rates are historically low right now.

*A solid realtor in your area will be able to refer you to a great lender and you can even meet with both at the same time. I recommend this approach as you'll get an idea of what you'll walk away with, what interest rates will be like as a purchaser and with that information you'll have an action plan devised on the spot!

Best of luck to you moving forward!

Abel

 

A good local real estate agent should be able to help you sell for a great price and find either on market or off market deals to transfer the funds into so you can repeat the same results as the first deal.   Check out https://mytrustedagents.com/  The website can match you up with an investment focused real estate agent that would be able to help.

Best of luck to you.


@Gunnar Linden Long term, your home will appreciate even more and you will wish you would’ve held on to it. My dad bought his home for $80,000 in 1990 and we sold it two years ago for $500,000 and mind you the home was outdated too. Hold onto your home and use your cash to buy another investment property or do a heloc. 

You nailed it.  Sell to access the cash buried in the existing property.  Put it to work.  If you can take out the cash (from the built up equity) and use it to double what you have now...what are you waiting for?

Originally posted by @Emily Smith:

@Gunnar Linden Long term, your home will appreciate even more and you will wish you would’ve held on to it. My dad bought his home for $80,000 in 1990 and we sold it two years ago for $500,000 and mind you the home was outdated too. Hold onto your home and use your cash to buy another investment property or do a heloc. 

Appreciation isn't based on equity, it's based on value.  If he puts that value in another property...plus, he gains equity from two properties instead of one.  That current equity has the same "face" value where it now or in a different property.  The investment value is greater if it can be moved to two properties instead.