Real Estate Agent · Jacksonville Florida · Member since 2020 · 48 posts · 30 votes
Hello! I am having trouble deciding on selling or keeping my house in Jersey that my husband and I have been living in since 2020. We have made major improvments, new roof, windows, kitchen total rehab granite countertops and added bedroom. Purchased for 180,000 and now it may be worth 275,000 or more
I like the buy and hold rental stradegy and want to keep it and rent it for 2200 a month. The mortgage is 1400. Its in Northfield NJ. Great neighborhood. Solid house 3 bd 1.5 bath.
my hubby wants to sell, he received orders to Jacksonville FL and we could buy a multifamily with the proceeds from the house.
I want long term growth. I was thinking of getting a Heloc and keeping . Pros cons?
Realtor · UT · Member since 2022 · 63 posts · 42 votes
4y
Wow, that is amazing! I was in your situation about 2 years ago. I put a lot of work into a property that was a mother-in-law single-family home and I was able to really showed the property's value. I wanted to expand and I looked into doing a cash out refi or selling. I ended up selling the property and using a 1031 exchange into a 10 unit building. It has now snowballed into 49 rental units in just 2 years. Sometimes it is scary to sell or it sucks to sell something you have worked so hard in but if you can turn it into something bigger, why not?
On the other hand, if you are able to get a cash-out refi and you can stay in positive cash flow you can keep your current property and still expand. That may be a good option to look into as well.
Hello! I am having trouble deciding on selling or keeping my house in Jersey that my husband and I have been living in since 2020. We have made major improvments, new roof, windows, kitchen total rehab granite countertops and added bedroom. Purchased for 180,000 and now it may be worth 275,000 or more
I like the buy and hold rental stradegy and want to keep it and rent it for 2200 a month. The mortgage is 1400. Its in Northfield NJ. Great neighborhood. Solid house 3 bd 1.5 bath.
my hubby wants to sell, he received orders to Jacksonville FL and we could buy a multifamily with the proceeds from the house.
I want long term growth. I was thinking of getting a Heloc and keeping . Pros cons?
Buy or sell?
thanks!
The goal here should be to expand your exposure/holdings. If you sell, you say you will be able to buy a multi-unit property. Does that mean you will live in one of the units and rent out the other units?
Alternatively, if you keep, will you still be able to buy an SFR in Jacksonville?
Between the two options, I would rather own a separate rental and also own my residence than to house-hack a multi-unit. I personally hate house-hacking because I don't want my tenants to ever be within visual range of me, but I acknowledge it's sometimes the only way to gain entry into what's currently a very expensive market. But you don't need to gain entry. You already have an ideal property you can rent out. If you are able to keep your current property and still buy an SFR in Jacksonville, I would do that. Rent it out for a few more years till you can 1031 it into a cash-flowing 4-unit.
I realize you'd be missing out on Section 121 exclusion benefits, but we are only talking about a gain of around 50K (assuming you put in around 20K cap expenses along with 25K in selling costs). So that really isn't a big deal. Which also brings me to my next point. By selling your current home, you'd hardly be 'cashing out' when you consider all the fees associated with selling real estate. You have a cash-flowing property. The only time you should sell is if you see a much better opportunity that can be attained by selling this one and using proceeds on that new opportunity.
Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes
4y
@Alana Reynolds You won't need to 1031 because you live in the house now. You can defer taxes on it if you put your proceeds into your next house. I would keep and also buy multifamily.