Sell or Refinance current "House Hack"

7 Replies

Hi guys! My name is Dung and I'm new to the BP forum but I have been watching the podcasts daily for months. I have been obsessed with learning more about rental property for quite some time now. I am currently in a dilemma...well I don't know if I should call it that considering the outcome for either would be pretty great. Anyways, I am currently involved in a house hack kind of by accident. So I bought a condo for $265k and put in about $25k to really spruce the place up. Fortunately the condo has appreciated in value of $100k. So here comes my "dilemma". I was debating on whether or not to put it on the market or hold on to this property (because the area I bought the condo in is really going up in value) and refinance it and take the equity out to invest in another property. Any suggestions? 

Thanks a lot guys!

@Dung Nguyen that really depends on what you plan on doing. Would you try to rent the condo out or would you continue living there? If you did rent it, would it cashflow? What if you stayed there and used a HELOC to invest with while your condo continues to appreciate?

Thank you @Heath Ryans ! My original plan was to sell the place then use the money to buy a sfh (repeat the house hack) and still have enough money to get a rental property. But now seeing how much this condo has appreciated, plus it is in a really popular up and coming neighborhood. I am having second thoughts on selling it, and using the HELOC to invest in a rental property and still stay here while the condo continues to appreciate. And yes if I would rent it out it would have a positive cash flow. I have somewhat of an emotional tie to this place because is my first property and also it is in the neighborhood I grew up in.

Originally posted by @Heath Ryans :

@Dung Nguyen that really depends on what you plan on doing. Would you try to rent the condo out or would you continue living there? If you did rent it, would it cashflow? What if you stayed there and used a HELOC to invest with while your condo continues to appreciate?

Thank you @Heath Ryans ! My original plan was to sell the place then use the money to buy a sfh (repeat the house hack) and still have enough money to get a rental property. But now seeing how much this condo has appreciated, plus it is in a really popular up and coming neighborhood. I am having second thoughts on selling it, and using the HELOC to invest in a rental property and still stay here while the condo continues to appreciate. And yes if I would rent it out it would have a positive cash flow. I have somewhat of an emotional tie to this place because is my first property and also it is in the neighborhood I grew up in.

@Dung Nguyen i think your two best options are to either sell it or live there and use a HELOC. If you sell, you will have a large chunk of cash to work with. if you can find a house in bad enough shape to do the same thing plus another rental property, that would be awesome, just make sure the numbers all work.

I have a feeling that if you use it as a rental, your emotional attachment to it will lead to you over-maintaining it, ultimately creative a negative cash flow situation. 

Welcome, @Dung Nguyen ! So glad you've rediscovered Bigger Pockets early in your real estate investing journey...this is a great dilemma you have on your hands!

If you're looking to grow your portfolio, I really like the HELOC angle. Since you're already plugged into the podcast, I'm sure you've heard over and over that there are many successful paths in real estate investing. You just have to find the path that works for you. This is a perfect example of that - almost any option you choose can be a great stepping stone for your investing career.

Best of luck to you and look forward to following your success on BP!

@Dung Nguyen I would rent it for two years, and then sell it to gain a little more appreciation but still qualify for the capital gains tax exclusion. I would also pull a HELOC to go ahead and use as a down payment on a new property to live in. You might want to make the new property one that would make sense to keep as a rental if you were to move again. This is assuming the condo numbers don't make sense as a rental in the long term.

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