A Successful Milwaukee Property Rehab - BRRRR vs Sell
Hey everyone, I just wanted to poll the audience here quick.
I purchased a home in the Bay View neighborhood of Milwaukee, WI, one block away from Humboldt Park about a year and a half ago. The purchase was with the intention to BRRRR the property. The single family market in Bay View is so hot at the moment though that the valuation after the appraisal outpaces the potential cash flow. I think rent on the completely remodeled 3 bedroom/2 bath property with a two care garage would be around $2500-2800, but the cash on cash return to keep equity in the deal isn't great.
Option 1: Refinance and keep 25% equity in the deal (currently owned in cash). Then look to 1031 the property in the future into something that offers a better cash on cash return to avoid long term capital gain taxes.
Option 2: List it as for sale by owner and considering the prospects of selling. Take the tax hit, but avoid 4-6% realtor fees.
Any input would be welcome.