I'll be on this site much more often now...I have questions for all of you, lol. No seriously though...I need help.
I'd love to start getting into flipping properties but have a lot to learn.
I'm actually trying to make a major decision on my primary residence right now...we bought it so good that we are very much considering selling within the first 2 years (Now) but don't know what to do.
So the house was bought in the mid to low 200s and we've done some pretty significant improvements....We're waiting on an appraisal to come back for our refinance..but we're hoping that it'll appraise for between $350-$375k..
So would I be a fool to not take the money and run if we could sell and cash out 100k+?
We like the house, but know we'll grow out of it when we have kids. But I also don't want to get stuck in a rental for a few years if the market doesn't experience a downturn within the next couple years that allows us to buy at a reasonable level again... and in this time we should expect that interest rates will be on the rise too right?
Such a tough decision.
If this is your primary residence (homesteaded property) I suggest waiting until after the 2 year mark to get tax free capital gain (tax free is the sweetest gift of them all). You can close on it 2 years and 1 day after you bought it. If you sell beforehand you might get hit with capital gain tax. I am not an accountant or an attorney so double check my advice. Consult your accountant on this one.
I don't see the market going anywhere soon in Boca ... I think it will be stable for the next 1-2 years with normal 3-5 appreciation and interest rates will most probably rise .... but slowly.
I would suggest refinancing - cash out and get the equity to start your flips going .- Interest on your mortgage will be tax deductible - Suggest reading AMANDA HAN's books. She contributes to BP big time and is a CPA doing only Real Estate Investors.
With a significant profit, you Really want to wait for the 2 years since you bought it, so the profit is tax free.
I agree with Wayne and Jorge on waiting 2 years for the tax benefit. I'm in the same boat...I have significant equity in my home so I'm preparing to list it (and have no idea where I'll be moving when it sells)!
As someone who has had to sell at the bottom of the market a few times due to corporate relocations (thank goodness for relocation packages that kept me mostly whole), I want to cash out on my terms this time.
Thanks for the advice everyone. Would definitely wait the 2 years...it's right around the corner..
Are any of you actively flipping properties around this area?
If we did pull some cash out we were going to consider using it for a few things...if anyone has an opinion on the value that may be added to the home for each I'd love to hear it! Also may just do a rate/term and get a heloc when we officially decide what to do with this mess lol
3rd bedroom addition
I'm willing to bet that there's a fine line between investing the right amount in a small house and over-investing in it right?
I love the house and neighborhood..personally I'd rather have a bigger boat than a bigger house...
Also if you are flipping...loaded question...how much does it really take to start and do it right?
I'm guessing each property type comes with different challenges..
Thats great, Everyone here has the right advice. To answer your question on whether you should or not is a matter of what your goals are and if you know how to get to those goals. as far as $100k to flip that is possible, I would try to partner up with someone that way you're not "all-in" on your flip. I would be willing to partner up if the right deal came along, If you do choose the route to sell I would definitely be able to get you the most in your pocket so that you can start your flipping adventure. I have done small partnerships in the past where my only investment would be $35,000 and I would technically be a 2nd lien holder on the property and had the attorney draw up a note and schedule where I am promised 50% my investment at closing totaling $52,500, the partners used the funds for renovations. There are many ways to finance your first flip even with hard money lenders etc. hope this helps
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