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Buying & Selling Real Estate

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Jorge Rivera
  • Las vegas
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Did I make the right decision?

Jorge Rivera
  • Las vegas
Posted Jul 29 2019, 09:00

Hi BP peeps,

I like to get people feedback on a decision I've been. So recently I refi my house ($30k), money was to purchase another investment property. But pricess seem to  be kinda high in the last Vegas area, so we decided to instead upgrade our current primary residence (bought it 3yrs ago with the intent of live and flip)wwhat is your opinion?

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Christine Kankowski
  • Real Estate Agent
  • Temecula, CA
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Christine Kankowski
  • Real Estate Agent
  • Temecula, CA
Replied Jul 29 2019, 09:17

As long as the improvements actually pan out to higher sales price...  Like for $30, you could add a bathroom, or remodel kitchen on an older home.  

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Chris Lynn
  • Rental Property Investor
  • Memphis, TN
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Chris Lynn
  • Rental Property Investor
  • Memphis, TN
Replied Jul 29 2019, 09:26

If you want to buy an investment property and you spent your source of cash on your primary residence, then that probably wasn't the best move.  Well, if you added more than $30k of value plus the transaction costs of buying and selling a primary residence, then I guess in that case it's okay.  But then again, since you felt the need to ask, I'm going to go back to the "not the best move" corner.

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Jorge Rivera
  • Las vegas
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Jorge Rivera
  • Las vegas
Replied Jul 29 2019, 09:46
Originally posted by @Chris Lynn:

If you want to buy an investment property and you spent your source of cash on your primary residence, then that probably wasn't the best move.  Well, if you added more than $30k of value plus the transaction costs of buying and selling a primary residence, then I guess in that case it's okay.  But then again, since you felt the need to ask, I'm going to go back to the "not the best move" corner.

 Thank you for responding. The reason I had the need to ask is because I am new to this investing world of real estate. I had the idea of investing out of state, but don't feel experience for that yet.

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Jorge Rivera
  • Las vegas
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Jorge Rivera
  • Las vegas
Replied Jul 29 2019, 09:52
Originally posted by @Christine Kankowski:

As long as the improvements actually pan out to higher sales price...  Like for $30, you could add a bathroom, or remodel kitchen on an older home.  

Thank you for responding we focused on remolding the downstairs bathroom, painting the whole inside of the house, put vinyl flooring in the living room, kitchen and dining room and fixed the backyard by putting 1/4 concrete and the rest turf. Still have about $8k left.

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Replied Jul 29 2019, 09:58

I cannot imagine spending the 30k on your existing home is going to get you a good ROI especially if you have been living in the home for 3 years. Unless you have been using buckets to catch the rain water for the past 3 years or you are in a home that has an ARV 400k+. But if you are like me and like the home you live in then sure spend the money and enjoy the home.

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Seth Ferguson
  • Rental Property Investor
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Seth Ferguson
  • Rental Property Investor
Replied Jul 29 2019, 10:22

Go back in time and buy another property!

But in all seriousness, you're the only person who can answer that. Nobody here knows exactly the properties, your situation, your goals, etc.

Account Closed
  • Rental Property Investor
  • Sacramento, CA
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Account Closed
  • Rental Property Investor
  • Sacramento, CA
Replied Jul 29 2019, 10:44

@Jorge Rivera any time primary residence becomes a part of investing discussions I reply with this: Your primary residence will rarely be the best investment available, and sinking cash into acquiring or improving one should be a decision that makes you happy. Not every dollar made must be spent on business endeavor, and while it's not a bad idea to upgrade your primary residence in exchange for added equity, there are probably other things you can do with that 30k that may yield a higher return. 

How soon do you plan to flip your primary? If it's soon, then this idea could be pretty profitable pretty soon. If you plan to live in it for another 10 years, then you're not actualizing this improved equity position and would be better off doing something else with it if generating a profit on the money is your #1 priority. If making your house nicer would make you and your family much happier living in it though, I would definitely recommend doing it.

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Casey Powers
  • Property Manager
  • Las Vegas, NV
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Casey Powers
  • Property Manager
  • Las Vegas, NV
Replied Jul 29 2019, 19:46

Be careful doing improvements on the hope of increasing property value. Many people make the mistake of over-improving or doing the wrong type of improvements and it doesn't increase the value as much as what you put into it. I have seen people very upset that the money they put into fancy floors and finishes didn't increase the value of the home like they thought it would. ALSO, you do not want to make the mistake of making your house the prettiest in the neighborhood - you won't get the ROI on resale value.

I would put the $30k into a down payment on an investment property.

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Alexander Ball
  • Reston, VA
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Alexander Ball
  • Reston, VA
Replied Jul 29 2019, 19:59

Unless your home is actually a live in flip I honestly don’t see it being a good deal.  If this worked investors would upgrade their properties all the time as opposed to buying new ones.  In general it seems to me like you guys justified spending that money on yourselves as a way to improve your lives and “invest.”  What I really don’t understand is why you didn’t do the work yourself and invest this money in another property.  Don’t spend that 8k on your property, that’s my very honest opinion.  I’d take that and invest it in another’s property.  The one main upside is you’ve probably gotten experience and some idea of the cost of home improvements.  Hopefully the at keeping knowledge isn’t useful going forward.