Buy or Sell and Why?

Question

Mike Thompson · Answer

Good news.

Sold.

Ron Means · Answer

More squadrons are moving to the Navy base in Oak Harbor, and the local area & region are growing.  I don't see signs that 98277 is nearing a price peak.  Since I live in the area and think the market is decent, I'm staying invested in the Oak Harbor market.

With that said, @Dan Denton poses a great question for you as an out-of-state investor: Could you get a better return elsewhere?  Unless you have other attachments to the area, I suggest you periodically evaluate & compare this investment to other potential investments.

Dan Denton · Answer

Consider your return on equity. Could you get a better return if that equity was deployed in another investment?

Or maybe you could spread that equity out over multiple properties elsewhere to reduce your risk (vacancy, markets, etc).

Mike Thompson · Answer

Thanks!

$410k is from a realtor CMA.

If I were to refinance, I could cash flow $200-$400-ish, but equity might be enough to make DP on a new residence for me AND buy another SFR to cash flow if I pick the right market.

Aaron Nelson · Answer

Hello @Mike Thompson!

I agree with @Mike Wright. It depends on what you value more - cash in your pocket or cash flow from the rental.

How much cash flow are you making? You mentioned $1680 income after PM expenses but how much are you making after paying the mortgage, budgeting for CAPEX, etc.? If the home is a SFR, you can probably sell, take the profits (equity), buy a rental property in a different area that cash flows just as well/better and still pocket some money (or use it to pay off debt). This is what I did when I sold my personal residence a few years ago and it completely changed my life.

Is the $410K evaluation from an appraiser or a "zestimate" from zillow? If the later, I am happy to run a CMA for you. I have family that lives up near Oak Harbor, including a brother-in-law who works at the base so I am familiar with the area and know the housing market is hot.

Would be happy to talk some more with you!

Mike Thompson · Answer

I lean toward liquidity so that I can reinvest equity as down payment in another market.

I believe98277 is artificially high value right now due to Navy base and would like to cash out in Sellers market.

Wise choice?