Is the decision I want to make too risky?

Buying & Selling Real Estate
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Is the decision I want to make too risky?

Abigail Kilgore
Rental Property Investor · Member since 2019 · 23 posts · 1 vote

Hi there!

So my gut says I’m making the right decision, so does the math but man my heart strings are making it hard to pull the trigger.

I have a duplex in downtown Orlando that I bought three years ago. I live and Airbnb on one side and I work on the other.

For about 6 years now I have wanted to go into real estate. My current job(hairstylist) has prevented me of doing that because of clients and how they’ll react. I’ve honestly been ready to leave hair for a couple years now. As most jobs though if you aren’t working you aren’t making money.

This is where I’m at. I have a chance to make a very good amount of money off of this house. Enough to where I could live for probably a year fully immersing my self in real estate. I would be able to move to south Florida where my family and boyfriend are as well.

With the sale of this house I could also be 100% debt free. I know most investors want to hold but man to have the opportunity to change careers and cities debt free with income to live on seems like the right thing to do.

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Chris Szepessy
Catskill, NY · Member since 2018 · 636 posts · 668 votes
7y

Unless you plan to reinvest at least some of the profit from the sale of your current home, you'll be back to cutting hair in the next year or so when your funds dry up. It seems as though you just don't like your job anymore, which is common with a lot of people. Have you thought about renting both sides of your current duplex long term and getting a good PM and then move south to be with your bf and family? You could also take out a HELOC or refinance it and take the extra cash and pay off debt and invest the rest. BRRRR method could probably work well for you as well.

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  • Chris Szepessy
    Catskill, NY · Member since 2018 · 636 posts · 668 votes
    7y

    Unless you plan to reinvest at least some of the profit from the sale of your current home, you'll be back to cutting hair in the next year or so when your funds dry up. It seems as though you just don't like your job anymore, which is common with a lot of people. Have you thought about renting both sides of your current duplex long term and getting a good PM and then move south to be with your bf and family? You could also take out a HELOC or refinance it and take the extra cash and pay off debt and invest the rest. BRRRR method could probably work well for you as well.

    2Reply
  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @Chris Szepessy

    I could but then I’m moving down with debt. My plan was to get a job in real estate even if that’s an assistant or a a receptionist. I would not plan on not working the goal is to be an agent

    0Reply
  • Shawn G.
    Rental Property Investor · Orlando, FL · Member since 2017 · 207 posts · 125 votes
    7y

    @Abigail Kilgore You would be moving down with an asset not debt. If you look at it like a business (which it is) you would have debt on the property for sure, but as long as the debt & expenses are covered by the income the property produces, it is a positive on your balance sheet and therefore an asset. Hope that makes sense.  

    I would go to some local meetups here in Orlando to start networking. You may be able to get started while you are still up here and move down there with the ball rolling. Let me know if I can help. 

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  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @Shawn G.

    Thanks Shawn! I’ll check some out! I totally agree with the asset part. The only thing is that I would still have this huge debt burden(personal not the property) that makes it hard to go with that decision.

    I guess I thinking if I am able to clear all that and still have around 50k to start fresh then my mental well being would be healthier:) I could also use that money for a down payment down there as well.

    I also have some taxes that are on a payment plan that it would take care of as well.

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  • Account Closed
    Rental Property Investor · Odessa, FL · Member since 2017 · 145 posts · 113 votes
    7y

    Pitching a different idea: Keep the hair job but work less, rent out the other part of the duplex and find a place to stay where the rent income you make from the duplex > the rent you pay. -OR- stay in the duplex and dedicate a room in it for cutting hair meaning you'll work and live in one part of the duplex and the other part will be rented out.

    With the free time you have from working less cutting hair study to get your realtor license and slowly move your way into real estate. 

    Maybe it's just me, but I'm not a big fan of selling properties especially if they generate income for you. If you do decide to sell, hit me up I'm looking for a multi family :)

    1Reply
  • John Woodrich
    Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    Most of the answers you will find on here will revolve around keeping or adding to your debt load but you have to do what works for you.  It sounds like the personal debt is stressful, if so I would pay it off and start fresh.  Sure, you could be ahead if you play the RE game but nothing is certain and paying it off could help facilitate a career change.  

    1Reply
  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @David Tsedaka

    Hahah I totally would do that but per Florida law I would loose my license:(

    I will let you know though! I meeting with my realtor tomorrow to talk numbers

    0Reply
  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @John Woodrich

    Thanks John! It definitely is. As much as I would love to keep it the stress and anxiety of the personal debt is pretty overwhelming. I bought the house when I was 23 to sell it at 27 and be able to start fresh and possibly buy something south Florida I feel is a win win?

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  • Account Closed
    Financial Advisor · CA · Member since 2012 · 128 posts · 76 votes
    7y

    Abigail;  I looked at your pic.  Wow.  Your bf should be moving to you!  It sounds like you will make lemonade wherever you go and you are young so do what works and however it turns out, just learn from it.  None of us are "you"!  We can't decide what is best for you.

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  • Natalie Schanne
    Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    @Abigail Kilgore - If you think Orlando will continue to go up in value, then keep your house. If you have significant equity, consider refinancing the house at all time mortgage lows to pull out cash and rent the property on both sides to pay the bills. If you think Orlando will be worth less in the future then sell. If you think you have a better property to buy where you’re going, then sell. I do not recommend moving in with a boyfriend until you’re married. You want to be in control. 10 years ago I bought a 5/3 house in DC suburbs for 255k. I rented out 4/5 bedrooms and lived in one. Brought in $2000/mo+ of income + 4/5 utilities to pay my $1500 mortgage so I was paid about $500/mo to live in my own house meanwhile I was getting raises at work and was saving like 50% of my 70k salary. I got a 30 year loan at 4%. And you know what? I have never ever paid more than the minimum on that debt. Why? Because for every $10000+ I can put in the stock market at 7%+ while paying 4% is a free $300/year which will grow and compound. Or saving up for a 5-20% down payment on my next house. That house is worth about 400k today. Sure I could cash out except then I wouldn’t bring in the current $3000+/mo which handily pays my 1600 mortgage AND my roommates/tenants are paying down my mortgage around $4000/year at this point. And it’s auto pilot even without a PM because the tenant quality is good. Consider joining the investher Facebook group. Sure I haven’t done anywhere close to as well as the people who bought in San Fran or nyc and their 200k condo is worth like 600k without upgrading anything but you can’t guarantee appreciation. All else equal, learn to calm your fear of debt. You own an asset. If you can bring in $2000/mo in rent to pay $1000/mo of expenses, or whatever, why would you give that up just so you don’t have the 1000 in expenses? Why sell the golden goose?

    1Reply
  • Rita Medeiros
    Rental Property Investor · Pompano beach, FL · Member since 2017 · 478 posts · 194 votes
    7y

    InvestHER has a Facebook page & also many female meetups across country, we have about 40 female investors at our monthly meetup in ft Lauderdale, try & find one in your area, it’s great for information & support.

    0Reply
  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @Natalie Schanne

    Hey Natalie!

    Thats an awesome ROI! My numbers would be close to the which is why I'm considering the sale of the duplex.

    Im actually not moving in with my boyfriend:) he just happens to be there along with my parents and sisters whom I’m very close to.

    This is more about me and my peace of mind then moving with a boyfriend.

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  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @Rita Medeiros

    Thanks Rita I’ll check that out! I was looking at the meetups down there and they were all during the week so I’ll see if that one has any weekend ones:)

    0Reply
  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @Karen Lee

    Hahah thanks Karen:)

    That was an option but my parents and sisters are down there as well! So for me it’s very hard being away from them.

    I think the more I do the math and what that looks like and I talk to my family and close friends who know me and my situation it makes sense to sell.

    I love this house and I know it can cash flow.

    But to be 27 and loose sleep 4/7 nights a week because the smooth of money it costs to pay for the house and all my stuff on top of it is a lot.

    Unfortunately I don’t have a situation like keen below where I can get raises and save 50%

    Do to have a chance to switch careers and be able to do that transition with less stress seems like a good deal.

    I don’t think most people can say they sold everything and cause move and live for a year without working(that’s not the plan cause I’ll go crazy) but just to make a point.

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  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @Karen Lee

    Natalie*** not keen

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  • Brian G.
    Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    7y

    @Abigail Kilgore I’m also generally not a fan of selling an asset that is performing well. However, I do believe “your biggest wealth building tool is your income.” If selling allows you to move into a new career, which has the potential to change your income significantly over time and if the move increases your quality of life by living closer to your loved ones then that makes a lot of sense imo. My only caution is to make sure you have dealt with whatever behavior patterns led you to be in debt otherwise if you don’t change those patterns, it will only be a matter of time before you are in debt once again after having become debt free. I know people who have refinanced, filed bk, etc and cleared their debt taking what seemed like the easy way out only to rack up debt again in time because they never changed the behavior that got them in debt in the first place. Read the book The Total Money Makeover by DR, it’s very helpful. All the best!

    0Reply
  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @Brian Gerlach

    Hey Brian! I was reluctant to sell but I think the big picture I does set me up better:)

    Definitely have learned a lot! I’m obsessed with the money podcast! I listen to probably 6 hours worth a week hahha

    I will never let those habits come back for sure

    0Reply
  • Tanner Marsey
    Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
    7y

    Very personal question. Have to do what is right for you. Being 100% debt free is priceless to some. I would say sell it. Enjoy being debt free. Go hard for a year. You should be able to make something happen or at least get the ball rolling. Also, if you have to keep doing hair, part time or on the side or whatever to make ends meet.... don’t hesitate to do so. Do what ya gotta do.

    0Reply
  • Darren Lenick
    Flipper/Rehabber · Davie, FL · Member since 2016 · 101 posts · 136 votes
    7y

    Hi @Abigail Kilgore,

    The decision is purely based on your comfort level in doing so. If you ask others, you will get a different answer from reach person based on their comfort level with risk.

    For me, I left IT after 28 years, sold my house in Toronto and moved to South Florida in 2017 to pursue my passion for Real Estate. Very similar to what you’re thinking about.

    Here’s my 2 cents speaking from experience:

    - make sure you have enough money to live off while making the transition and include a contingency for mishaps.  I had to have neck surgery in 2018 for 2 herniated disks related to flipping houses and was off work for 6 months. Luckily I had the funds to cover this.

    - take time to learn the market. You can do this by working in the industry. Your idea of working for an agency as a receptionist or admin assistant is a great way to do this. I did Project management for my wife’s family who are International investors and spent 8 months in Orlando flipping 6 homes for them in 2016.

    - Go slow. Don’t over extend yourself both financially and physically.

    - You said your boyfriend lives in South Florida and you’re moving down here to be closer and start your career here. It’s a tough market down here and I invest mostly in Central Florida. Also make sure your boyfriend is onboard with your decision because this is not a 5 day a week 9 to 5 job.

    I don’t regret making the change at all and I have the support of my wife and 4 kids. I REALLY love the fact I don’t work nearly as hard as I did in IT. I make more flipping 2 houses per year then I did as a Director if IT working 60-80 hours per week.

    Feel free to connect with me if you have additional questions. Always willing to work with others in the industry.

    0Reply
  • Kurt Hubbart
    Member since 2018 · 1 post · 0 votes
    7y

    Darren, Great reply! 

    It is a great way to make a living. Start with one and build up a TEAM. That may be the most important part I found. Up here in the NW everyone wants the work done I 4-6 months so there is a lot of competition for contractors. I found working with a wholesaler( A GOOD ONE) was a big help I tapped in to his contractors and buy most of my houses through them. 

    Good luck!

    0Reply
  • Canesha Edwards
    Developer · Atlanta, GA · Member since 2014 · 475 posts · 424 votes
    7y

    @Abigail Kilgore

    I’m going to offer you a different perspective. I say if you feel like this is what you need to do for yourself, then I say do it.

    You mentioned you wanted to change your career to real estate, but you’re kind of already in the business if you AirBnB your house. Why not renovate the side you use as a business and AirBnB both? The income from the property should allow you to cut back on your time at the salon. Or essentially quit.

    Or if you just want a completely fresh start, sell the property and take the time you feel you need to study and get educated on real estate.

    There are plenty of options and no one option is better than the next. It’s all about where you are in your life and what makes the most sense for YOU!

    Just my 2 Cents

    Canesha

    0Reply
  • Abigail Kilgore
    OP
    Rental Property Investor · Member since 2019 · 23 posts · 1 vote
    7y

    @Canesha Edwards

    Hey! That was originally the plan but city of Orlando has made it very difficult now! I actually just found out that I’ll have to drop one bedroom per their new guidelines and I would have to be present during all stays:/ Disney and Visit Orlando I think are the reason behind that unfortunately

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  • Canesha Edwards
    Developer · Atlanta, GA · Member since 2014 · 475 posts · 424 votes
    7y

    @Abigail Kilgore

    Wow. Yeah I know the short term rental laws are becoming more stringent.

    In that case, I would probably sell and start over. That’s just me.

    0Reply
  • Adam Moore
    Urbana, OH · Member since 2017 · 12 posts · 8 votes
    7y

    Follow your gut. It sounds like you want to sell and move. Do that. Don't over-analyze. Your happiness is your greatest asset, and the ROI you should be focusing on.

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