I have a home in a desirable neighborhood. Currently have mortgage at 2.75. Could leave and rent out make $900 to $1,000/month.
OR... I could sell and net $200,000 to $300,000, no capital gains.
I am hoping to retire in 10 years.
I could move to one of my two rental homes (making less than $500 on each). I can't sell those because I got them 6 months ago using a 1031.
What would you do? And why?
Why not refinance and rent it out? Then you can use the refinance money to go buy another and get passive income. Or HELOC it? I would call lenders and see what is the best they could do. I like to use this calculator to run my numbers https://www.calculator.net/ren...
Los Angeles, CA · Member since 2021 · 584 posts · 738 votes
4y
@Leticia S. Tucker
There plenty of options. It all depends on your risk tolerance. If I was in your shoes, I would extract the equity now, leverage and reinvest into better cash flow deals, rinse and repeat a few more times. If you plot out your strategy and focus on your criteria, you can achieve at lease 5X your cash flow in the next 10 years. You may find that you can achieve closer to 10X.
This will required a few more 1031 exchanges. You may have to be a bit more active because a PM will not have YOUR interest at the forefront. To control your own destiny, take matters into your own hands, be a little more active, make moves when opportunity arise. LEAVE your emotions out of your business. TREAT this like a business.
You live in an area that has a lot of cash flowing properties. Many of them can be had off market, but a few can still be found on market.
I live in the general area and invest near you. I have done three exchanges in 2021 (SFR to multi), and now four more in 2022 (multi to larger multi). One of them was a recent exchange from 2021. I sought some guidance from Dave Foster on this last one and use his services.
The most important question are:
What is your FI number?
What what is your current lifestyle number?
How much cash flow will fit your needs?
What is your risk tolerance?
Finally, what is stopping you?
People will give you their best opinions based on their personal knowledge, experience, and biases. The opinion I am giving is no different. I hope you find an option that meets or exceeds your needs.