Hi guys,

I currently live in Phoenix and bought my house about 3 years ago. I bought the house for 280k, renovated the entire house for about 15 k and the house is currently worth about 340k. I am thinking of a few things:

1. Sell the house and get the money tax free without capital gains.
   
   1. Buy another house to live in with this money, use the same principle, house that needs reno then live in it for 2 years then sell again.
2. Keep the house, rent it out but get a HELOC loan and buy another house to move into.

Please advise the pros and cons of either strategy. Also, I would love to hear any other strategies that you might feel is better.

Would you be selling with agent? Cause that would be a big profit gone with that price of a house. Then if your going to pay half of closing . next issue would be can you find a good deal ? Also now the interest rates will be higher around 5% not the high 3 or low 4 %

I would say do buy and hold if it cash flows and can get some equity out of the house to fund your next deal.

@Alus Kunwar

Strategy #1 will net you around 20k or so when it's all said and done once you factor in realtor commissions(6%), your closing costs(~2%-3%), and possible the buyer closing costs(3%). @Anthony Bellesbach made some valid points on finding the next deal and making sure it works. Though not impossible, it still presents a challenge.

Strategy #2 will probably put more money in your pocket if you choose the right lender. There are some credit unions that will do 90% and up to 100% LTV on a HELOC on your property. PM me if you want the info for them. Good luck!

@Alus Kunwar

Well, the big question is "What are your goals?" Both short term and long term. And what does your wife think bahahaha. But seriously.

What would be your reason to move? Bigger better house? Better neighborhood? Do you have kids (or plan to have kids) that these moving plans might affect?

Also, another thing to consider is what a second home is going to cost you. And what your home would rent for... and if you'd even be able to get a loan for a second house. Best to talk with your lender and see what might be possible.

If the long-term goal is to own multiple properties, and buying a second house to move into won't cause you to get into debt up to your eyeballs, and you can rent your current house for enough to cover all the bills, then go for it.

But depending on your family plans, that all might be different.

If you let us know a little more, perhaps we can give you better advice about buying a second house in Phoenix.