New guy over here, need help!

[Frederick Karnoski]

Hi everyone thank you for taking the time to help me. Here’s my situation..

I live in California and purchased my first property on a 4 bedroom house brand new home build, we are the first tenants.

-Purchase price- 418k

-20% down

-Spent 20k on backyard and front yard

3.65 interest rate.

Fast forward to now just refinanced in February for 2.75 no cost refi.

Owe 338k on the home now

As you know the market is at all time highs and the same model house with less updates just sold down the street for 575k.

Here’s my options I have come to.. either sell the house and make 137k profit w/ no capital gains and take that and my original money put into the house and start my rental venture or pull the equity out and rent it.

Rental rates are skyrocketing in my neighborhood at 3200 a month for my size house. So I would be seeing about an $868 cash flow on the property.

I’m leaning more towards pulling the equity out and renting the waiting to reinvest into a rental with a partner as well as purchasing a new primary for my family and I.

Can’t wait to get everyone’s feed back. Thank you for your time.

[Ramon Jenkins]

1031 exchange sounds okay

$868 per month cashflow for one single family house sounds even better

Hopefully rental rates in your area maintain or go higher for next several years

Suggest pulling out only the bare minimum need, so when market flips you are not under water ( house value , cashflow , debt to income for future purchase and etc )