To sell or not to sell

[Benjamin Palasek]

Hello bigger pockets members, I started buying real estate for the purpose of buy and hold investing. I bought two property's in the last year and a half at 30% below market value and have been renting them at about 1.75% of the 2% rule. Over the last year home values in this area have increased 40%. I have one property listed for rent now. A prospect tenant asked if I would do a land contract. Should I sell now and take a 70% increase on purchase price? If so should I put it on the MLS or set up a land contract? Or should continue to rent since cash flowing buy and holds are why I got in the business in the first place? Any thoughts or words of wisdom would be appreciated.

[Joe Villeneuve]

Originally posted by @Benjamin Palasek:

I owe 60K. Comps in the last few months are about 150. Is capital gains tax still 15% if your a small fish?

 Don't sell it.  Refinance it...like it was mentioned above. 

Sell Numbers:
* 90,000 Profit (if you sell full assumed ARV)
* -14,000            15% CG Tax
* -  9,000            6% RE Commission 
* -  4,000            Closing Cost
 $63,000            Walk away.....and no cash flow

      or

REFI Numbers:
* 112,000 Refi 75% of $150k ARV
*  - 60,000        Existing Loan payoff
* $ 52,000        Walk away....and you have your cash flow still coming, and...

you have $52,000 for another property.