Investor · Fort Lauderdale · Member since 2014 · 51 posts · 15 votes
Hello BP friends!
On March 2020 I bought a new construction single family home with a accessory unit for 725k I have been house hacking living on the in-law unit. The main house is a 5bed/3.5 bath with a pool and the other unit is a 2/1. Last year the main house grossed an average of $13,500/month and after all expenses I made about 8k month and have been living for free (that also includes my expenses). Based on comps it looks like I could get about $1.3M for the property now. I'm on a strong financial position and I have a 3 figure salary working for a tech company. I did refinance last year, currently I own 645K and have already recouped my initial investment.
This property has provided great cash-flow and financial freedom if I decide to leave my job. Based on the strong appreciation Im wondering if I should sell and use leverage to acquire more properties.
Property Manager · Cleveland, OH · Member since 2015 · 699 posts · 799 votes
4y
All I know is that I’d be leaving that 3-figure job in a hurry.
But it sounds like there’s still a lot of equity you could pull out. I’d only sell if I were confident I could get that money into a better investment without paying the cap gains. Otherwise, why fix what ain’t broke?
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
This is not the same market as 2020. You are now buying at the top with higher interest rates. You have a pretty sweet deal going right now, why rush into something else? See what happens after the mid-terms and maybe wait until Nov '24.
Property Manager · Cleveland, OH · Member since 2015 · 699 posts · 799 votes
4y
All I know is that I’d be leaving that 3-figure job in a hurry.
But it sounds like there’s still a lot of equity you could pull out. I’d only sell if I were confident I could get that money into a better investment without paying the cap gains. Otherwise, why fix what ain’t broke?
All I know is that I’d be leaving that 3-figure job in a hurry.
But it sounds like there’s still a lot of equity you could pull out. I’d only sell if I were confident I could get that money into a better investment without paying the cap gains. Otherwise, why fix what ain’t broke?
LOL. I'm assuming 6 figure? Otherwise Tech is not paying as much as they use to :)
Why not keep your job unless you truly aren't happy with it and invest the 8k/mo into another property? Seems like with the extra cashflow and the market potentially shifting could provide good buying opportunities.
Investor · Fort Lauderdale · Member since 2014 · 51 posts · 15 votes
4y
I've been trying to purchase another property but the market has been really competitive. I've put several offers this past couple of months and most of them were bought cash well above offer. Everything I see is on the $1M plus range and I only qualify for a $647K loan. Was thinking of selling and buying long term SFH rentals or a fourplex.
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
4y
Hey @Ariel G., if you can't replace it easily then you should hold on to it. It sounds like it is doing very well. I am with @Bruce Woodruff on this. Keep the cashola flowing.
On March 2020 I bought a new construction single family home with a accessory unit for 725k I have been house hacking living on the in-law unit. The main house is a 5bed/3.5 bath with a pool and the other unit is a 2/1. Last year the main house grossed an average of $13,500/month and after all expenses I made about 8k month and have been living for free (that also includes my expenses). Based on comps it looks like I could get about $1.3M for the property now. I'm on a strong financial position and I have a 3 figure salary working for a tech company. I did refinance last year, currently I own 645K and have already recouped my initial investment.
This property has provided great cash-flow and financial freedom if I decide to leave my job. Based on the strong appreciation Im wondering if I should sell and use leverage to acquire more properties.
What are your thoughts?
Cash out refinance and reinvest that tax free money. Keep your job, have less cash flow but if you sell you will have to pay your own expenses again and taxes on the sale.
I've been trying to purchase another property but the market has been really competitive. I've put several offers this past couple of months and most of them were bought cash well above offer. Everything I see is on the $1M plus range and I only qualify for a $647K loan. Was thinking of selling and buying long term SFH rentals or a fourplex.
Try looking at other markets as well. I know you're doing well in your own market but many here have done well with out of state (or other parts of FL) investing which you could try as well.
Lender · Asheville NC · Member since 2016 · 469 posts · 317 votes
4y
Can you take out a HELOC? It's technically your primary right? Cashout refi may slash cashflow if the rates are twice as high right now, as when you bought.
Investor · Fort Lauderdale · Member since 2014 · 51 posts · 15 votes
4y
@Gerald Pitts I already refinanced last year and took the max I could pull out. I’ll check again if I can do a heloc but I think I couldn’t based on what the lender told me.
Real Estate Agent · Seattle, WA · Member since 2019 · 301 posts · 188 votes
4y
Hey Ariel, depends a lot on your goals and what you have lined up next. What is your overarching goal with FI and which decision would align best with that goal? Do you have a better deal lined up when you sell? What would you do with the equity? I think answering these questions is important.
If it was me, I’d only sell if there was a better deal to put the proceeds in that aligned better with my interests and goals. If not, the cash flow you mentioned sounds pretty sweet and I’d be hard pressed to sell. Good luck!
On March 2020 I bought a new construction single family home with a accessory unit for 725k I have been house hacking living on the in-law unit. The main house is a 5bed/3.5 bath with a pool and the other unit is a 2/1. Last year the main house grossed an average of $13,500/month and after all expenses I made about 8k month and have been living for free (that also includes my expenses). Based on comps it looks like I could get about $1.3M for the property now. I'm on a strong financial position and I have a 3 figure salary working for a tech company. I did refinance last year, currently I own 645K and have already recouped my initial investment.
This property has provided great cash-flow and financial freedom if I decide to leave my job. Based on the strong appreciation Im wondering if I should sell and use leverage to acquire more properties.
What are your thoughts?
If I was on your position, I would hold on to the property and wait. Then down the road, do the BRRRR method and buy another property without selling your currently home.
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
4y
Well done, almost $600k in value increase and $100k in annual cash flow, after covering your own housing costs and possibly your other living expenses...not sure (and, if that includes covering the mortgage payment too...wow). We should be taking advice from you.
Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 957 votes
4y
@Ariel G., if you're single, $250k of that equity will be tax free, $500k if you're married. I'd talk to a CPA about that portion of it. Other than that, congrats on the huge gains!