Updated over 9 years ago on . Most recent reply
To sell or not to sell...
I have a SFR that I have owned for 7 years and rented to the same tenant for 4 years. It's the only property I own. I owe 90k and near as I can tell it would sell for about 120k. The mortgage payment is $625 and I'm renting it for $750. I want to do some fix and flips, however I'm not sure I can use the equity in my SFR rental without selling it. So, my questions are can I get to that equity without selling, should I just sell, or is there another way I should look at financing my objective? I'm looking for advice and opinions from anyone who might want to chime in.
Most Popular Reply
I would start with getting a CMA from a local realtor. Make sure that number is 120k and not 145k or 105k. That could make this conversation a whole lot different.
Are you managing this property yourself? Is it close by? Are you doing repairs yourself?
If the answer to these questions is NO, then I would absolutely consider selling. With those numbers, my guess is that you are losing money each year holding this place. However if you are just losing work or hustle managing and fixing up this place and you want to hold on cuz you see some awsome growth in the area then you might want to stay in.
As far as a refinance on the place I would be careful with pushing the debt service much higher cuz you are already at a break even point in my opinion (if you are doing all the work yourself).
In the end (with limited information) i would vote that you sell and take the tax burden. especially if you are wanting to get into flipping houses.
Good luck out there!