Who is selling in this market?

6 Replies

@Bernardino Graziano

Sold an 8-unit and 1031'd into a 14-unit value add that I close on at the beginning of June.  I should hopefully have it renovated by the beginning of the new year. 

I might sell one. I’m sure I can clear enough profit after taxes to pay off my last 4 mortgages. A long way from 10 mortgages for a total of  $1.5mil in 12 years. (Back when I was “unemployed” instead of “retired”.)I’ll be giving up $10k/year in rental income, but saving $12k a year in interest expenses and I’ll gain $40k/ per year in cash flow. (Income will go from $140-$142k, but cashflow will go from $100k to $142k)

When I did most of my buying 10 years ago my criteria was less than 10 years old, now many of them are 20+ years old and it’s starting to show.  I did 15 year mortgages and sent every dollar they produced to paying them off. 

I figure if I sell one out of a dozen, what’s the worse that can happen? The other 11 keep shooting to the moon? Most of my tenants stay 4-8 years so I don’t get a lot of chances to sell and in these uncertain tax times why not take a few chips off the table  

Ps. I use actual numbers so people can see a path to financial freedom with 10 houses or less. You don’t need 30 or 50 unless you goal is to be Uber rich. 

All that being said, when the tenant moves out (transfer to Colorado Springs) I may very well let my PM talk me in to renting it if we can get $2-300 more per month. :-)

@Bernardino Graziano I bought an inexpensive SFH last May to do some repairs to then rent long term. Due to issues with another property my contractor was tied up with we didn't start work on the new house until November. By December my realtor and I both had an epiphany that it was going to take me close to 25 years to make as much money renting the house as it would to upgrade the renovations and flip it.

I’m just about ready to list it and once all the bills are paid I will make a profit of over twice my salary last year and about 40 years worth of rental payments. Obviously I’m not accounting for depreciation and other write offs.

I'm not planning on doing a 1031 because I've got an extremely cheap property in mind that will need a total rehab and will use all of the money but will then cash flow ridiculously or I'll refinance it or take a line of credit perhaps or a HELOC.

In the meantime I’ll have bought 7 units and hope to secure the last 2 in the next month in the last 4 months.

I’m in Northern New Hampshire up by Canada. My town has one blinking stop light but is a desirable place to live and the next town over is a little bigger with a Lowe’s and Home Depot and a few box stores. Not many, but enough to keep us from having to drive an hour and a half twice a week to shop!!