All Forum Posts by: Bernard Evans

Thank you all in advance. 

I own a fourplex that I have had for 5 years now. Interest rate is currently 6%. I make about $900/month profit currently. I am in the middle of a refi set to close next week. I can do one of the following scenarios and have spent the past 3 weeks on the fence about the decision and need your help. 

1) Refi to 4%, 30 years. Will make about $1,200/month profit

2) Cash out refi to 4.125%, 30 years, can take out 140K cash. I will now barely be breaking even each month and probably be about $50/month underwater in the winter months from the snow plowing. 

I'd be happy with the monthly profit and use that towards my own primary mortgage, but it is not necessary. I'd be happy with the cash out because I could use that for another rental, or more importantly, to put it towards our "forever" home. It would be nice to get the wife and kids into a house we love and settle down, but again, not necessary at this time. I'm stuck...

Hey everyone, thank you for your replies. It is definitely helping me and getting me more informed. Here are the financial details that may help in your replies:

Purchased in September 2015 for $403,000

FHA loan, mortgage remainder $380,000

Remodeled both units $95,000

Mortgage $2,333/month includes taxes, insurance, pmi, P and I

Rental downstairs $1,250/month

Conservative take home guesstimate if we sell after fees, closing costs, commissions, etc $171,000

Hypothetically, I would use about 1/3 of that to pay off remaining debt and become debt free, a small chunk of that to do another FHA O/O duplex, a big chunk of that to do 25% down on a rental and the remaining money used to remodel the O/O duplex.

The other option is to keep this and live in it, continue to pay down debt (approx five years), then start saving for another rental property after I'm debt free (another approx 3 years). So, in 8 years I could purchase our "forever home"  and keep this duplex and rent out the top. 

Hope this additional info helps. 

Thanks for reading my first post on Bigger Pockets. I need your advice. 

In 2015 my wife and I sold our home in LA for a healthy profit and moved to SLC. I knew nothing about real estate, but listened to my CPA and decided to invest. With the money we made, we paid off half of our debt, purchased a fourplex to rent full time, purchased a duplex that we owner occupy and lastly did a full remodel on both units in the duplex. 

So, now we have been living in our duplex for two years with half that time having the other unit occupied since we did the remodel. We are now thinking about selling our duplex since we would pay little capital gains in only having rented it for 12 of the 24 months. 

It should be noted that my family and I love this duplex, there is definitely some emotional attachment here. It's an amazing layout, it's in a great neighborhood and the remodel really makes us feel at home. 

So, the question is, do we stay living in this awesome place and just continue to save up for our next rental property in approximately five years, which would allow us to keep this rental in a great location? Or do we sell and take advantage of the increasing real estate here which also doubles with our remodel? Our broker ran a conservative, low number scenario for us and it looks like we could do almost the exact same thing we did back in 2015: pay off our remaining debt (so be debt free), purchase another full time rental, purchase another o/o duplex and have a little money leftover to remodel it. 

My delay comes from hearing and reading things like: never sell a rental property if the purpose is to build a rental property portfolio, never sell that duplex, it's in the best area (one block from the University of Utah) and so on. Plus, the emotional attachment.

Thoughts?