To sell or not to sell.

[Benjamin Gonzales]

My current portfolio-

Home #1 Cache, OK, Rented out for the past 2.5 years (VA loan)

Home # 2 Lacey, WA, Primary home for the past 2 years on the 23rd of December (VA loan)

Zero cash flow

Option 1- Sell my home in Washington State under a Sole propriety for minor tax benefits to my understanding. Use the net proceeds to invest but how much? I must keep in mind I need to pay down my own debt or at least that’s my belief. Get utilization down so I can apply for bigger loans to invest into passive income.

Option 2- Hold on to my home in Washington State... Wait for the market to sell at the right time, then invest into more real estate. Downside is, I wouldn't have a lot of capitol to use. I would still have higher amounts of credit card utilization. And I'd probably be paying a property management team to collect my rent. I've looked at different rent calculators, but the information looks really skewed.

Option 3- Sell my home in Oklahoma. I owe approx. 140K, the market says I could potentially get 190K. Use the capitol to invest into real estate and possibly a house depending on the right situation. I've thought about doing a 1031 like-kind property but have no clue how it works other than a 3rd party handles the transaction, and you have 45 days to identify replacement property.

Goals- I want to start my own LLC and see that it could possibly help me out financially. I spoke with a CPA advisor from wealth ability, and I only see benefits, thank you bigger pockets podcast! I need to come up with about 8K more to retain the CPA for this year's taxes. What I didn't know is that tax deductions based on legal entity has no meaning when filing for deductions.

[Carl Davis]

In regards to your first question, I am not sure I fully understand what you are asking specifically. Do you mean how do I structure my business as a realtor or how do we manage it?

Some investors like to save a percentage of their cashflow for vacancies/repairs but we actually save every penny we get extra for the first two years then start to save a smaller percentage. In about two years we haven't had a month that we made less than our expenses. If the seasonality is hitting really hard and you have vacant months saving every dime in the beginning should more than help. than after your first year you can better budget based on the previous years performance.