What would you do in this case....?
Good evening. I am at a crossroad and I was hoping the fine people of BP could weigh in. I currently own a 2 bed/2 bath condo in downtown Huntington Beach worth somewhere in the 450k ballpark. Rents for 2500. Bought for 355. Owe about 315 on it. It’s been a rental unit for the last year and a half. Barely cash flowing but tenant is great and hassle free and it’s in CA so appreciation and blah blah blah (everyone knows that stuff).
Anyways, I want to get more rental properties in the future. I am wondering if I should hold this, sell it and 1031 it to invest out of state, try and obtain a heloc and use that to buy additional properties Or some other option I am unaware of.
Please weigh in. And thanks in advance!
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- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
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@Jj Horst, the refi route to pull equity out is a good move. But you can end up losing a lot of the value of it if all your doing is diluting your equity so it splits between a not so good rental (the one you refi) and a good one. If your properties are not performing well now they will only do worse if you refi. And you only get the use of part of the equity. What @Rhonda Blue did that was so savvy was to 1031 and get access to 100% of the equity and then divide it into down payments on properties that were all good cashflow. It's kind of a scorched earth tactic. But if your current portfolio is not strong you won't fix it by adding debt. Get rid of it and reposition.
- Dave Foster
