Hold or unload a two family

[David Jones]

Hello everyone,

         Im interested in some opinions from experienced investors and will explain my current scenario. I recently sold my first two family and profited about $40k on it and I have that money saved. I own another two family that I bought two years ago for $135,000 and under todays current market have been told by multiple realtors that I can sell it for close to 225,000-230,000.  My current rents are $850 and $800, it cash flows about $450 a month. 

I have potential to put  college kids in there and it will cash flow about $1500 a month(rents would go

Up to $1650 per side), or should i unload the house for roughly $220,000, after closing costs and mortgage payoff walk away with roughly $105,000 then sit on the money for some time or upgrade to a commercial property which is what I want next. 

Please let me know what you guys think.

Thank you

[James C.]

David,

If you sell, then plan to pay (unless you are using some form of IRA) taxes on the 105K profit. I would suggest maybe taking a bigger loan against the property and using that cash to do a DP on a commercial property. Advantages: Tax free since it's a loan and I think it steps up your depreciation basis (double check both of those with a tax person). Alternatively, wait until you find a commercial property you like, and 1031 into it.

Good Luck!

Jim