Selling Primary Residence in a Seller’s Market
We purchased our first rental last year and are eager to keep moving forward. In order to do this, we’ve considered selling our primary residence. We bought the home during the Great Recession and have made a considerable profit on the appreciation and improvements. If we do this, we could potentially have enough cash to put down on a new (hopeful value add opportunity) house and put down payments on a couple more rentals. But in this market, to get anything comparable to what we have now, we will have no choice but to increase our mortgage. I’m hoping that the cash flow from a few more rentals will more than offset this, but we are a bit nervous about increasing our living expenses. Is sacrificing the safety of our current cheap mortgage worth cashing in on the equity to invest with? Any thoughts on this would be helpful!
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@Andrew Perkins you can also go the other direction which is to take out a HELOC on your primary residence. This will give you access to the equity you have in your home which you can then use to continue investing. I like this strategy because it allows you to keep your primary mortgage in place still if that is your goal.
I personally have done a live in flip and then have used a cash out refinance and HELOC on my primary homes. Without the equity I have built by buying fixer upper homes, I would not have been able to acquire apartment buildings.