All Forum Posts by: Jake Allen

Hey, we purchased a fixer upper as our primary in 2017 & have renovated it ever since.  New HVAC, plumbing, electrical, floors, kitchen, baths & added a deck.  It's been great, but our family is growing and could use more space.  The house is a 3/2, built in 1950.  We have a 15 year mortgage with about 7 years left (throwing a bit more on principal each month).  Our payments are around $950 and the local rental rates are near $1500.  We owe around $75k on the loan, but the value is near $250k.  I'm racking my brain, would it be wiser to hold onto our first home & keep it as a rental?  Or sell & throw that money towards our next primary residence?  Ideally avoiding capital gains tax, we've owned it for more than 5 yrs & lived there the whole time.  We've captured a lot of equity over the past few years & I kinda hate to "throw it away" towards another primary residence.  Especially since the market might be turning.  So I guess i'm leaning towards keeping the first property as a rental.  Any advice is appreciated! 

I think I will hold off on this deal for now.  Thanks everybody for making sense of this!  I'll update on this deal if something changes.

Preface: No deals under my belt, but finally talked the wife into living in a MFH.  Woo!

I have yet to contact the owner about this property, will be doing so shortly.  It concerns me that it's been on the market for over 6 months now and chopped 50k off the original asking price.  Hopefully I can get a good idea of the condition of this property.  

The deal:

FHA loan

Quadplex 5 bed, 4 bath, walking distance to small town’s main street outside of Charlotte, NC

Built 1900, .19 acre, crawlspace, vinyl siding, central heat and window units for A/C

2014: New roof and installed water heaters for each unit 

List: $250,000 (Posted end of 2015 for $300k) 

Currently fully occupied with $2,200 gross rent (Not sure if tenants are month-to-month or long term yet)

Tenants pay all utilities

PITI almost $-1,500

35% maintenance/CapEx $-770

8% vacancy $-175

Home was foreclosed then sold back in 2012 for 50k.  Whoever bought this quad saw an opportunity, threw some money at it and shot the equity through the roof.  Any way I work the numbers at $250k, it just doesn't net positive, especially if we only rent out three units.  How would you work a property "deal" like this, put in a low bid, say $200k?  Or is something not adding up?  Or should I just keep looking?  Thanks in advance guys/gals!  

Look forward to meeting everyone tonight!