Primary Residence with $150K+ in Equity - Sell, Refi?

2 Replies

Hi BP!

I live in Atlanta, GA and purchased a 1 bedroom condo in Dec 2016 for $328,000 with 20% down and spent somewhere around $30k in renovations. I did not have to pay closing costs since I used commission towards it. I am a licensed agent and work in new construction so I was able to get discounted pricing on the renovations - I would estimate it would have been a $40k-$50k project for the average homeowner.

This is a luxury high rise building built in 2008 in Buckhead that has very few 1 bedrooms. The 2 bedrooms have been selling from the high $400’s to low $600’s and the 3 bedrooms from the high $700’s to $2 million.

Shortly after I purchased, the prices for the 1 bedrooms jumped up from selling in the low $300’s to the high $300’s for units that had either not been renovated at all or very minor updates. A corner unit slightly smaller than mine that was not renovated closed for $405,000 in March 2019 and there is a pending 1 bedroom slightly larger (has a small study and larger bathroom) at $439,000 which will be closing 7/31 so I will be able to see the sale price soon.

When I purchased, my mortgage was around $1,650 and the HOA fee was $515/month including cable/internet. My mortgage went up last year due to taxes to a little over $2,000/month and the HOA fee increased to $600/month around the same time so now I am paying over $2,600/monthly from about $2,165 previously.

I owe right around $250,000 on the mortgage with a 4.25% interest rate. I believe I could easily sell it between $400,000-$425,000 with the view and renovations. I have just reached out to get information on a Refi since rates are lower and my credit score is higher than when I purchased.

The 1 bedrooms have been renting for $2,200 to $2,600. I have been on the list for a leasing permit for a while now just incase I ever wanted to rent it out in the future. Since I have been on the list, it has barely moved and there are many other owners ahead of me so I doubt I would be able to lease it anytime soon.

I currently have no need or desire to move but with all the talk about the market being at the peak, I am very conflicted if I should try to sell it for as high as I can and easily walk away with $150k or do a refi to get a lower interest rate and pull out what I can in equity. I would hate to see the cycle turn in the next couple years and have trouble making back what I originally paid + renovations when I have the chance to make at least $40k more than I put into it with renovations. I am happy living there now but would not want to be upside down and stuck for several years if/when the market cycles.

I would put this money in savings to use for real estate investments as I come across them. I could move into a studio or 1 bedroom apartment between $1,300-$1,600 which would be $1k or more less per month than my current mortgage/HOA/taxes. The prices are really high in the desirable areas in Atlanta where I would want to live so I don't think it would be a good idea to jump into purchasing another primary residence right away.

Sorry this is so long but I wanted to give all the details in hopes to receive some feedback that will help me make a decision!

@Megan B. The market will remain good as long as Trump wins the election. You should have another year or so.

If you have another opportunity you want to peruse then sell, if you like how it's working for you now leave it and if you aren't sure, take out a HELOC. That's the best of both worlds.

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