Sell or hold in California?

Buying & Selling Real Estate
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Sell or hold in California?

Brandon Leffler
Rental Property Investor 路 Stockton, CA 路 Member since 2020 路 35 posts 路 22 votes

I have a property in Stockton, CA that is worth 420k and I owe 260k. It has really solid family renting who do not want to purchase ever, so they will never leave. I can sell this year and not get hit with capital gains. It currently cash flows $600/Mo.

-I鈥檓 not sure if I should stick with the solid renters or take the $$ and invest in other markets out of state?

I own 2 other properties and they鈥檙e all in this city close to each other.

What is the best move?

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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges 路 St. Petersburg, FL 路 Member since 2013 路 9k+ posts 路 9k+ votes
5y

@Brandon Leffler, Crossroads for you.  No bad choices.  Just shades of different.  My basic rule of thumb of life is "if it's not a world beater then always always take the first tax free off ramp".  This goes triple in CA.  If you don't keep it out of their hands today.  It will end up in theirs forever.  

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  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges 路 St. Petersburg, FL 路 Member since 2013 路 9k+ posts 路 9k+ votes
    5y

    ...

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  • Joseph P FinkelsteinPro Member
    Long Beach, CA 路 Member since 2020 路 71 posts 路 46 votes
    5y

    Hey Brandon. I work for a company that helps people manage their multi-family portfolios, but I have to imagine your situation is the same.

    If/when you are an appreciating market, you make most of your long term gains from leveraged appreciation. What you'll find and I'm sure you can do this with your property is that your return on EQUITY (Capitalizing because its different from ROI) starts to go down y-o-y. 4.5% cashflow is great, but if you want to continue to grow your portfolio selling might be the right move. The general rule of thumb we use is that once you're around 50% equity to value its probably time to get into a bigger property through an exchange or refinance.

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  • Brandon Leffler
    OP
    Rental Property Investor 路 Stockton, CA 路 Member since 2020 路 35 posts 路 22 votes
    5y

    @Dave Foster thank you Dave! I had no idea there was a group over here. Appreciate it 馃憣馃徑

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  • Carlos Ptriawan
    Member since 2019 路 7k+ posts 路 4k+ votes
    5y

    Most interesting about Stockton is it's actually one of the city in Nor Cal that could give positive cash flow and appreciation at the same time. Even better than palo alto :)

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