Hello fellow investors or future investors!
I am struggling to make a decision about what to do with one of my rentals. The last tenants have really made me want to not actively invest anymore. They have been out since January and the house is destroyed.
I have been approached by several investors interested in purchasing it, but I also had a make ready company come out and give an estimate for a full flip type reno. I am also not sure I want to part with the property and I am trying to reflect on why I bought it in the first place. I have also considered doing an almost full rehab then selling it and keeping profits. However, that involves real estate commissions, closing costs and higher long term gains taxes. Here is the info:
Home: 3BR/2BA 1280sqft. Large lot in cul de sac. Zip 70083
Purchase price: $99,500 in 2016
Loan amount remaining: $69,000
Wholesaler offer: $116,000
Rent: Could likely get $1400/month once rehabbed
Full Rehab estimate: $40k (I would remove some items from their estimate. They included everything that way things could be removed. I would estimate I'd spend $30k.
Long term gains: Wholesaler ($116,000-$99,500) * 15% = $2475 Im in a high tax bracket); sale full price ($165,000-$99,500) x 15% = $9,825
Depreciation recapture: Have deducted $4130 x 5 years = $20,650 * 25%= ~$5160
I am assuming refinancing only makes sense if I want to cash out to repay myself for the rehab work, then hold the property. This means I could get more horrible renters.