Asking for a friend.

3 Replies

Hello everyone, I have a friend that don’t know what his next step should be regarding his house. He bought it out right a few years ago, fixed it up and just the other day got an appraisal back for 93k. He was thinking of selling it for 90k, pay off two vehicles and take 60k to put down on a new house to live in. (Not a live in flip) He also was wondering if he should refi his house, pull 75k out, pay the vehicles off and put the rest down on a new house. rent the original house out and take that money to pay the refi mortgage, the rent would cover the mortgage plus an extra 150 per month ..I’ve been telling him about refining his house and use that towards a BRRRR or some other real estate investing. Any ideas or thoughts on this would be grateful.
It doesnt sound like your friend has much interest in renovating, so the BRRRR might not be something he/she wants to get into. Rent covering the mortgage plus $150 is too slim, in my opinion, to keep as a rental as well. It sounds to me like selling the property is a better idea than renting with those numbers. What your friend does with the money after that depends greatly on his/her real estate goals.

I agree with @Jason D. . $150/door in cash flow is not worth his time in a Mid West market. Sell the house and if he wants a rental use some of the money to buy a $20-25k house with cash and rent it out for around $700/month.