Selling a current rental property FSBO.

3 Replies

I recently just rented my SFH that I bought in 2018.

Backstory to all this: I bought a SFH at $176,500 in 2018. I had 2 friends move into it with him helping pay down the mortgage. 8 months later I landed a new job and had to move out of state. At this time I had only one friend in the house. My note each month was $1,140. He was only paying $1,050. I put up the extra $90 since I still had some stuff at the house. He recently moved out in October. I got the house rent ready. Putting about $1,500 dollars into it (Dishwasher, microwave, new carpet, paint, etc.). I then had to come out of pocket $8,700 for a new roof. I had a renter move in, in November. Renting it out for $1,600/month. They recently called me and asked if I would be willing to sell it. Comps right now for the area are around $190K - $195K. I'm just looking to get someone else's opinion on the situation. I could sell for sale by owner and not have to pay real estate fees and 1031 exchange it into a property or properties that cashflow better. Here's what the current numbers look like: I do manage the property myself, so technically is cashflows $219. But I also did just come out of pocket around 10K so it will be awhile before I see that come back. Thanks in advance for any advice.

Rent: 1600
Mortgage/Ins: 1,141
Vacancy: 80
Repairs: 80
Capex: 80
PM: 160
Cashflow: 59

@Christian Thompson , Are real estate taxes in your mortgage number? If not you're negative and that's not good. If so you still may want to sell now and place your replacement asset near you or invest it in another house hack.

If your acquisition as 176 and you've added another 10 in improvements it's doubtful you'll have much profit to warrant a 1031. I'm guessing you may only have a little bit of depreciation recapture to content with. So really a perfect time to start over without much of a tax issue.

Originally posted by @Christian Thompson :

I recently just rented my SFH that I bought in 2018.

Backstory to all this: I bought a SFH at $176,500 in 2018. I had 2 friends move into it with him helping pay down the mortgage. 8 months later I landed a new job and had to move out of state. At this time I had only one friend in the house. My note each month was $1,140. He was only paying $1,050. I put up the extra $90 since I still had some stuff at the house. He recently moved out in October. I got the house rent ready. Putting about $1,500 dollars into it (Dishwasher, microwave, new carpet, paint, etc.). I then had to come out of pocket $8,700 for a new roof. I had a renter move in, in November. Renting it out for $1,600/month. They recently called me and asked if I would be willing to sell it. Comps right now for the area are around $190K - $195K. I'm just looking to get someone else's opinion on the situation. I could sell for sale by owner and not have to pay real estate fees and 1031 exchange it into a property or properties that cashflow better. Here's what the current numbers look like: I do manage the property myself, so technically is cashflows $219. But I also did just come out of pocket around 10K so it will be awhile before I see that come back. Thanks in advance for any advice.

Rent: 1600
Mortgage/Ins: 1,141
Vacancy: 80
Repairs: 80
Capex: 80
PM: 160
Cashflow: 59

If I am reading this right, I would sell, take your remaining equity and buy a nice duplex or fourplex to cash flow better and start over as Dave says. Not much advantage of any for the 1031 exchange. Remember the QI will charge you a few bucks to get the exchange done.