All Forum Posts by: Brad P.

@Stephen Richerson I consider myself a full-time mediocre investor, haha. Thanks for the pep talk, though. Could you clarify the "sweeping" strategy? I've read a bit on it, but it seems like playing with fire. Maybe I'm misunderstanding something.  

@Patricia Steiner Good points. I tend to agree about the rental -- it's just not optimized to be a cash-flowing rental -- and I'm leaning toward selling. Thanks for your input! 

@Dave Foster Thanks! Yep, the equity is a bit of a mirage, but your figures are about what I was projecting: ~$30K after costs of selling the rental (into 1031), plus ~$30K-50K in primary equity available via HELOC, depending on the lender (75-80% LTV).

If I’m thinking about this correctly, that would give me at least $60K, which should be plenty for 25% down, to redeploy into a rental property with much better cash flow … right? Also, I was under the impression a 1031 would shield me from both capital gains and depreciation recapture. Is that correct? Any other potential landmines? 

@Joel Owens Thanks! I didn’t mention W-2 income because I’m not relying on it to fund any properties -- they should pay for themselves and then some. But I do see your point, so let’s say I’m in the “100K and some additional income” with monthly surplus.

The way I look at it now is that the rental barely pays for itself (before maintenance), while the return on any equity is 0%. Couldn’t/shouldn’t that equity be put to better use? Or am I undervaluing something? 

I’m a rookie RE investor who’s new to BP and looking for some guidance.* First, though, I have to say that I’m amazed by the depth of knowledge on BP and the willingness of the community to give helpful advice in an otherwise very competitive arena. Thanks to everyone in advance for what I’ll learn here!

I’m hoping that by spelling out my current situation, which should be fairly common, the experts here on BP could help lay out the best strategies to help me and other newcomers just starting out. Here’s my situation:

Primary residence in Charlotte, NC

• 3/2.5 SFR (2,353 sf); Value ~$345K, mortgage ~$227K (@3.875%), equity ~$118K

Rental property in Matthews, NC (Charlotte suburb)

• 2/2.5 SFR (1,180 sf townhouse): Value ~$145K, mortgage ~$97K (@3.875%), equity ~$48K
• Rent $1,125/mo; PITI: $744/mo; HOA $202/mo; Mgmt fee (6%) $67; Net ~$110/mo (before capex)

For context, the townhouse was my former residence, which I bought new in late-2007 (oops!), and wasn’t intended to be a long-term rental. Fortunately, its value has bounced back, which makes selling an option.

I know there are endless options when it comes to investing in real estate, so what I’m really asking is, generally, what would you do, given the equity available in these circumstances?

If this post is still way too generic to provide any helpful guidance, I can at least tell you that my long-term goal is to hold multiple cash-flowing rentals and pay down those mortgages ASAP. Happy to provide more info if necessary.

Thoughts? And THANK YOU in advance!

*Again, I’m a newbie, so please forgive me if I’ve violated any terms or unwritten rules for the BP forums with this post!