All Forum Posts by: Susan Dootson

Thank you all so much ... much food for thought! After the initial excitement of selling seeming like the perfect option, we are going back to thinking about our long-term goals and if doing a cash-out refi would enable us to keep the house AND invest in a different market with a STR. Thanks again! This was my first post, and I'm so glad to have found this community!

Thank you!  I really appreciate your reply .... you're correct -- yes -- proceeds of first home sale will go towards both third home (new construction) and the 4th fixer upper or at least a property that we can buy with cash from the proceeds of the first home sale.  You're right -- current income and cash flow are an issue, so good to know that we're on the right track of this not being a bad move.  I did more research today and on top of the numbers working out, it just feels like the right time to be doing this. Thanks again! 

We have two properties are building a third. 

1) First home is a single-family that we are fortunate to own free and clear. It is 9 years old and estimated to sell for $550,000. Our long-term renters have just said they are moving to another state and will vacate by July.  If we re-rent this home, we would list for $2,800 or $2,900 (current long-term renters are at $2,600). 

2) Second home is a townhome we currently live in, but have rented out as of June 15th. We built it in 2020 and with a mortgage payment of $1,800 and renters paying $2,950 from June 15, after expenses, will cashflow enough to cover the HELOC we took out to purchase the third home ....

3) Third home is a single-family home being built and closing date is September 30. We are stretching ourselves with this one, given the higher interest rate and sale price of $505,550. Both of us are on the mortgage as of now ..... and from what I understand, I am forfeiting any 1st time homebuyer credit by doing this, but we felt it was worth it as we plan to live in this home for a few years and it felt right.

Question: What would you do with the paid-off single family home worth $550,000? We have it ready to rent again, but wonder if we should sell, buy a fixer upper and start a STR given the age of the home (9 years) and potential for major upkeep bills? We live in an area of universities, wineries, and historical significance, so STR appear to be strong still in this area. We always did plan to sell the house once it reached 10 years, as we prefer to have newer properties with minimal upkeep/repairs.

From what we understand, we cannot do a 1031 exchange, as we need to take some of the money from the sale and put it toward the third home we are building as well as then invest in that STR.

Basically, we would love the extra cushion of putting more down on the new third home that we will live in.

And we're thinking if we can get a STR up and running quickly, we will replace that rental income we were getting before.

Does this make sense?  What would you do?