Sell or keep? Bought as a flip, but.............
Hey guys,
Here is my dilemma, I bought this house for $100k. I’ve spent right around $30k in it. My realtor is telling me to list for $189,900. Good profit. That was my goal.
But, the more that I listen to podcasts and think about my future, I want to start keeping some of these properties. I’m considering renting this thing out and refinancing to get my money back. Here’s the catch.
Average rent (from 2 different local property management companies) is $1200-1250 per month.
If I refinance out at 130k (assuming it’ll appraise at 180ish) this is what I come up with.
Piti $800ish a month
Vacancy $120/month
Management 7% $87.50/month
Repairs 5% $60/month
Capex 2%. $25/month (low because it's completely renovated)
Water $50/month (backcharge tenant for this)
Leaves me with roughly $100/month cash flow. With very little left in the deal, basically closing costs left in.
What would you do?
Most Popular Reply
@Preston Quinn One thing to think about is how much money you’ll actually get to pocket if you sell. If you have $130k into it and sell for $190k that’s a $60k delta which looks pretty good but you still have to allocate for costs of sale (~$13,300), cap gains tax (~$12,000-24,000 depending on your tax bracket and whether it’s short term or not), holding costs during the listing time period and during the sale, etc. all ads up to maybe $20-30k in your pocket, maybe even less. If it’s a high appreciation market with increasing rents I’d consider keeping it as a rental for a few years personally.