I just sold my first rental home and I made 109,000!
I purchased this 2 bed 2 bath 1349 square foot house in Turlock California about three years ago for 72,000, I put 15,000 into it after I completely gutted it so everything is new inside. I rented it out without even posting an ad or sign and made about 400 dollars a month profit for those three years.
We listed the house a couple of weeks ago at a bad time since the kids are all getting out of school and graduations are taking place. Today the second person to look at the home put it under contract and it's scheduled for a 30 day close. It sold for 175,000 and my estimated sellers net sheet says we will end up with 109,000 cash after all of the fees!
We are going to reinvest this money into a nicer home in Texas using a 1031 exchange. The good news for us is that we have more homes to sell off that should net us about the same results and allow me to buy many more rentals with the profits.
I have a question, my plan is to roll the money over from each house into a rental in Texas using the 1031 and then refinance the home to pull the money out later to buy other rentals. Do you guys think this is the best most efficient way to transfer the funds without the taxes from the state of California?