Buying & Selling Real Estate Discussion

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Mike Lynch
  • Shallotte, NC
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Running the numbers again on my vacant property... Still Confused

Mike Lynch
  • Shallotte, NC
Posted May 7 2022, 05:25

Hi,

I have been sitting here running the numbers again for the 4th time and I'm still confused.

Years ago, we took out a mortgage to buy a home for $107,000. We owe $39,000 on it now. Our interest rate is 3.6%. The sale price estimate today is around $250,000 maybe. Since we lived in it 2 of the last 5 years, we would not have to pay around $25,000 of Capital Gains Tax.

I have been making repairs to it, new shingles were $8,500. New appliances were $5000.00, but it will need new windows and HVAC unit pretty soon as they are timed out. ( $ 20,000 )

Monthly Rents in this area for a 1,385 sq. ft. home is around $1000.00 to maybe $1500.00 per month.

Yes, I could sell it and put 20% down and maybe get DSCR loans to buy more properties, but there is no inventory. Junk homes are listed for $90,000. Decent double wide mobile homes with land are selling for $180,000, which means I would have to try and get $1,500 to $1,800 rent each month for a mobile home and I think that would be very hard to do here. Decent 3 / 2 homes here are selling for $350,000 plus, and it would be very hard to get $3,000.00 plus rent here unless it is a beach rental or VRBO. Homes near the beach are now over $500,000. Homes on the beach are $800,000 plus.

So, my home has been sitting and waiting empty for months as I can't figure out what to do. If I don't sell soon, I will have to pay capital gains. So, if I sell and put down 20% buy more properties, I am worried that the homes cost so much that people are not going to be able to pay the high rents. They might only be able to pay half of what I need them to pay.

What do I do? ..... I feel like I am between a rock and a hard place. What am I missing?

Southeast NC, North Carolina

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