To Sell or to Hold near Amazon HQ2?

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To Sell or to Hold near Amazon HQ2?

Ben Mills
Member since 2019 · 4 posts · 1 vote

I own a condo within 1.5 miles and a few metro stops of the new Amazon HQ2 site in Northern Virginia.  I owe $378k and the property is currently worth 415k. Currently, I have great tenants in place but at current market value, I am out of pocket 400$/month.  Should I cut my losses now and sell or give it a chance to appreciate?

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Frank Wong
Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
7y

I agree with @Russell Brazil to sell it.  We don't know what the future of prices will be and how long it will take to appreciate where you want to comfortably exit.  We do know today its costing you -$400 a month.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    How much are you into it for? You would basically be walking away with zero.

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  • Ben Mills
    OP
    Member since 2019 · 4 posts · 1 vote
    7y

    Hi Russell - We put about 10k into renovations, and have owned since 1/2017. It was financed with a VA loan with. 3.5% interest rate.

    It’s a long story but it was never intended as a rental but I was unexpectedly transferred out of the area so here we are.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y
    Originally posted by @Ben Mills:

    Hi Russell - We put about 10k into renovations, and have owned since 1/2017. It was financed with a VA loan with. 3.5% interest rate.

    It’s a long story but it was never intended as a rental but I was unexpectedly transferred out of the area so here we are.

     That makes a little more sense then with a likely zero down loan as to why its so negative cash flow. 

    Id personally probably sell rather than being -$400 every month.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    1Reply
  • Frank Wong
    Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
    7y

    I agree with @Russell Brazil to sell it.  We don't know what the future of prices will be and how long it will take to appreciate where you want to comfortably exit.  We do know today its costing you -$400 a month.

    2Reply
  • Andrew Zannotti
    Killeen, TX · Member since 2017 · 127 posts · 91 votes
    7y

    @Frank Wong not associated to the post but your FB marketing popped up on my timeline, bad *** to see you are knocking it out the park

    2Reply
  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    7y
    Originally posted by @Ben Mills:

    Currently, I have great tenants in place but at current market value, I am out of pocket 400$/month.  Should I cut my losses now and sell or give it a chance to appreciate?

    When you say that you are out $400/month, is that after factoring in the pay down on your loan or is it just pure cash flow? 

    If every month you have to take $400 out of your pocket to meet the expenses, but $600/month is applied toward your loan balance after the interest payment, it may not be a bad deal. Think of it like a forced savings account.

    1Reply
  • Ben Mills
    OP
    Member since 2019 · 4 posts · 1 vote
    7y
    Originally posted by @Greg M.:
    Originally posted by @Ben Mills:

    Currently, I have great tenants in place but at current market value, I am out of pocket 400$/month.  Should I cut my losses now and sell or give it a chance to appreciate?

    When you say that you are out $400/month, is that after factoring in the pay down on your loan or is it just pure cash flow? 

    If every month you have to take $400 out of your pocket to meet the expenses, but $600/month is applied toward your loan balance after the interest payment, it may not be a bad deal. Think of it like a forced savings account.

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  • Ben Mills
    OP
    Member since 2019 · 4 posts · 1 vote
    7y

    Greg - You’re correct.  The negative 400 is pure cash flow.  I hadn’t considered it from the other perspective but I see your point.  Our principal deduction each month is around 700/month at this stage of the mortgage.  Thanks for the insight.

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