Hello there BP family. I read, I watch and I learn a lot from the resources both on this platform and at meet ups. However, I need advice badly! I have a question about how to be creative with this situation. I want to purchase a turn key STR for sale already income producing at 18%. Using DSCR. My capital is low right now but I need $50k for my portion of down payment and have a few options to obtain the funds. First, I can pull out money from a primary residence on a HELOC (only small amount available $50k available), cash out refinance, or just wait until my flip sells ($80k profit won't be sold until end April) and use proceeds to do STR, or use both resourced so I will have additional money to maybe even buy a 2nd STR. Any advise or additional suggestions is greatly appreciated!!
Thanks so much! And after do you think I should sell the primary or keep it so I can do the help call over again. I was thinking about downsizing since I'm a contractor I could buy a house that needs work and just live in it to cut my overall cost, and focus on my STR's. I usually do flips but slowing down there and focusing on STR's in state and out.
Canton, MI · Member since 2016 · 112 posts · 47 votes
4y
Before you sell your primary home consider capital gain taxes (check out 2-out-of-five year rule for paying capital gain taxes). Your tax situation may guide either beneficial to sell or refinance your primary home for future investments.
"The 2-out-of-five-year rule is a rule that states that you must have lived in your home for a minimum of two out of the last five years before the date of sale. However, these two years don't have to be consecutive and you don't have to live there on the date of the sale"
Thank you! Yes it's o my been a year. About $150k equity but the HELOC I'm sure it's only 70%LTV so I won't get much out, but it's still enough to do down payment on my STR