Advice for a novice Oakland real estate investor?
Hi everyone! I'm new here to the Bigger Pockets forum. (In fact, this is my first post!) I'm really interested to see what expert advice I can obtain from the many real estate investors here.
I have been fortunate in my purchase of Oakland real estate over the last ten years. In 2009, I bought a house in Maxwell Park with an ex for about $250k and we sold it for $520k in 2016.
In 2013, I bought a condo near downtown Oakland for $320k and have had tenants in that property who have pretty much been covering the mortgage and other expenses. If I sold that condo now, I could probably get $575-$600k for it.
And then in 2016, I bought the house I live in now for $648k and plan to sell it in the fall for around $875k, hopefully more with improvements I've made.
After I sell the house, I plan to do a deferred mortgage on a house my boyfriend plans to buy in cash. My mortgage broker tells me that so long as my half of house costs no more than $600k, I don't have to bring cash to the table. This is appealing to me since borrowing more money now while interest rates are low makes sense to me.
Here are my questions:
What should I do with the condo and the proceeds from my house sale?
My tenants at the condo just told me they are likely moving out of the condo. If I don't do a 1031 exchange, then I'll suffer a tax hit on the mandatory depreciation for the years it was a rental. Tax free, I could walk away with nearly $300k from the condo sale I managed to do a 1031. If I keep it, then it can probably continue to appreciate both short term and long term, since it's a short walk to downtown Oakland, which is only increasing in value. Plus, I'd forever benefit from the lower property tax basis based on my $320k purchase price. I could start to cash flow positive with the next round of tenants, but only minimally. Or should I go through the headache of the 1031 exchange?
And, what about the proceeds from my house sale? I could foreseeably walk away after a sale with around $350k. I am considering investing in emerging areas of Sacramento that are downtown convenient but haven't arrived yet or an airbnb rental near Yosemite with a friend/ friends or a rental or two in Nashville where my brother lives, which seems to have good rental prices compared to purchase prices.
Clearly, I am all over the map and would love to hear your thoughts.