All Forum Posts by: Tim O'Brien

@Brent coombs. I agree.  We've decided to sell.  Living out of state,  thin margins, and cashing out seem to all tip the balance.  

Thanks all for your responses! 

@Andrew Johnson  That's a brilliant way of looking at it. Thank you!

Thanks @Marcia Maynard

@Nicholas Blish.  thanks for the input.

@Andrew Johnson. thanks for the input.

More info; it has been my primary residence.  I just moved out in December.  I would be paying a property manager, as I now live in a different state.  I've wanted to be a landlord for a while.  Bought in 2010 for 130k.  I realize it doesn't cash flow with mx figured in, but I am sitting on 50k (that I can invest) that I cashed out, so is this factored in to the cash flow when people analyze? as someone else would  be paying down what could have actually been profit in the end when/if I sold for equity.

I understand that because I've lived here for the past 6 years (minus 2 months), I would be free and clear on capital gains.  Is this correct?  

I'm wondering how one would consider cash flow in a cash out refi. Do you use the new mortgage payment for cash flow? my situation; have a house worth ~$290-310k. refinanced and have about 51k in cash out, and a PITI payment of $1,110. I think I can get approx 1,300-1,500 in rent. With maintainance etc. that's not much of a cushion. So do I sell, or rent it out? how do I analyze? Any input or questions for more clarification would be welcome. Thanks!

@Bill S.I appreciate the feed back.  There are seemingly so many different metrics to analysis that I don't know how anybody ever makes the decision to buy a property.  I'm told use a 50% vacancy rate and the 2% rule etc.  None of  those work with this property, or anything I've seen in Denver. I know it's best to always err on the conservative side, when analyzing, but how do you pull the trigger? Are you looking at flipping, vs. renting?  I have a bit of analysis paralysis.  

If I do keep the home, I want it to provide income forever.  I don't really ever plan on selling. However if an offer that I couldn't refuse came up, it is good to know there are still ways around the large cap gains hit.  

Thanks for the reminder that it's apples and oranges with the leverage that RE provides compared to the stock market.

@Dan Mackin, Thanks for the heads up. I will have to do the numbers on a lump payment for PMI when I do close. I am planning on a 10% down payment.

@Brandon Hall, @Steve Vaughan,  Thank you for the thoughtful responses.  I hadn't really considered tax's yet

 @Kevin Bellavance, Great Idea!  It may be a bit before I can make this work as I'll most likely be using equity for the new primary residence.  I like the thought of leveraging the equity for more income properties.  

More info: bought the house for $130K. refinanced 2 years ago at 3.375%. I got a HELOC on the house 5 months ago and house appraised for $205K. I have been looking a lot at comparable houses and am confident it would sell for at least $225K, with location and current market. I do have a small balance on the HELOC. I was planning on using some of the HELOC for a down payment on our new house, unless it takes a while to find (6+months), in which case I would have the down payment saved.

If I sold and cashed out I would use a portion of the capital to bring my equity up to 20% in the new house, while investing the rest.  The market in Denver is not great for investing right now, so investment would mostly go in stocks.  The amount I would be able to invest would be approximately 30-50K. 

The market in Denver is rising fast.  The location is on the mid to higher side of appreciation in Denver.  

Thank you for your reply's. I really appreciate any advice and ideas.

Tim

Thank you Steve, 

Do I have to put that cap gains back into a primary residence?  I will definitely talk to my tax adviser.

Hi all,  

My situation: looking to move into a bigger house in hopes of family getting bigger. I currently live in a 1/1 sfh that I own. I bought in 2010 and have approximately $100,000 equity, and ow $118k. I think I can rent this house out for approx $1300-1650. mortgage payment is $715 PITI. I live in Denver. the house is ~100+ years old.

My question: how do I analyze if I should sell this house when I find something new, versus rent?  I would like to accumulate some rental properties over time, but RE investing is not my primary source of income.  

I'm sure more info is needed.  I'm just not sure what all I look at and what assumptions I can make.  thanks for any help.