I need to play out current sell, refinance, hold scenarios for my current portfolio.
I own 2 homes. I bought them 6 and 3 years ago. I’m 31 years old, single. My first and primary residence is a 2/1 worth $230,000 and I owe $105,000 with interest rate of 3.5%. I have lived here more than 2 years qualifying for the no capital gains tax? The second and cash flowing +$400 a month rental is worth $160,000 and I owe $67,000 with an interest rate of 4.0%.
I’m debating selling one or both houses because of how high the housing market is and the fact both are worth double what I bought them for. The problem is I need to reinvest it back into a home and I feel like I’d just be buying at the top of the market and then what’s the point? I’ve also considered trying to refinance and sit on the money until the housing market dips again and purchase another rental. I would like to upgrade my primary residence to a 3/2 with more land. I prefer to live in a rural area, both houses are in towns but smaller, rural towns. Last thing I have considered is selling both and having $218,000 minus capital gains tax? and having the most money I’ve ever had in my bank account and saying hell ya sweet double. But then what?
On a serious note I would appreciate the advice/ what would you do if you were me. Thanks in advance
Hi @Peter McLeod ,
Classic answer here: it depends... on your goals for the future! Grow your portfolio? Buy your dream house? Increase Passive Income?
With that said, you're spot on: you'll have no CG tax should you sell your primary residence. Sell that and your other SFH rental and you'll have a decent stockpile for a down payment on a nicer home with some land.
If your goal is grow your portfolio, then I would consider leveraging what your currently own. HELOCs. Private Money Loan. 401k loan. Self-Directed IRA. Stock Portfolio Line of Credit. Etc. There is money out there.
Increase Passive income: What are your thoughts on a house hack? Maybe a live in flip?
There's a million roads you can take here, just all dependent on your goals!
@Robert Belz awesome response and thank you for taking the time! I suppose my goals would be to make the best decision that would help me secure long term wealth! I am willing to take risk. I also am very construction knowledgeable and have no issues with a live in fixer flip. My problem I suppose is that I work in many different fields/ different sources of income/ have too many passions, i.e. I am currently building off-road race cars for a living and it’s all cash jobs but steady, therefore consistent income is an issue for me as far as refinancing or utilizing my equity is concerned. Do you think a hard money loan is possible or do I need to just buckle down and get a real job a.k.a. consistent income for loan purposes.