Wanting to sell!!! How do I use my equity for my first investment? Should I?

Question

Long story short... I'm a brand new Real Estate Agent and brand new to the investment world. I want to sell my house that has about $200,000 in equity but will need maybe $50,000 to remodel. I haven't done an estimate on that yet. Thinking of downsizing into an RV and put that on my father in law's land. Thinking $50,000 for the RV. Say 100,000 left to invest but how? 1031? House hack? I don't want to pay taxes on the $200,000 and want to invest. Ideas???????????

Super new to it all and I don't have a team except my family being able to remodel or build. (They do it all! AC, Electric, Plumbing, etc...) Wanting to use their business with mine.

Any advise will be greatly appreciated!!!

Super new to it all and I don't have a team except my family being able to remodel or build.  (They do it all!  AC, Electric, Plumbing, etc...)  Wanting to use their business with mine.

Any advise will be greatly appreciated!!!

Lawrence Potts · Answer

@Kaci Bryant,

How long have you lived in this home? If you’ve lived there 2 of the most recent 5 years, you can defer on the capital gains ($250k if single, $500k if married). Talk to your CPA about that 👍

If you can help your family do the remodeling, you’ll save a lot of money. Most of construction cost is tied to labor.

You could go the RV route. I have a client doing that as he rents out his home to traveling nurses and he floats around oregon as an electrician. He renovated his RV though. RV’s were designed to be short term solutions, not long term. I’d expect things to happen in there over time (furnace stops working, leaks in the roof, etc). So be warned.

What you should do is 100% dependent on what you want to accomplish with real estate. We have no idea what your goals are, what your why is to doing real estate, or what’s important to you. I’d take the time to write out what you want to be doing in 5 years, visualize all the details, and then work backwards. For example:

Goal: I want to be a full time real estate agent in 2028 and be able to reinvest my commissions into rental properties.

How much will your lifestyle cost you then to be able to float your career? $6,000/month  in passive income.

If you average net $150/door in cashflow, you’d need 40 rentals in 5 years. That’s 8 rentals per year average.

See how that works? Once we know what that goal is, we can work backwards and then help you out more 👍

Keep us posted on what you do!

Long story short... I'm a brand new Real Estate Agent and brand new to the investment world. I want to sell my house that has about $200,000 in equity but will need maybe $50,000 to remodel. I haven't done an estimate on that yet. Thinking of downsizing into an RV and put that on my father in law's land. Thinking $50,000 for the RV. Say 100,000 left to invest but how? 1031? House hack? I don't want to pay taxes on the $200,000 and want to invest. Ideas???????????

Super new to it all and I don't have a team except my family being able to remodel or build. (They do it all! AC, Electric, Plumbing, etc...) Wanting to use their business with mine.

Any advise will be greatly appreciated!!!

Super new to it all and I don't have a team except my family being able to remodel or build.  (They do it all!  AC, Electric, Plumbing, etc...)  Wanting to use their business with mine.

Any advise will be greatly appreciated!!!

Henry Clark · Answer

Capital gains.  Have you lived there for two consecutive years in the last 5 years?   Then no taxes.  No need for 1031.  250/500 caps noted above.

Recommend you don’t do the RV.  Only loses value.

Try to buy and sell on the same market.

Duplex or quad.   House hack or BRRRR into it.

Try to keep as much cash on hand. Do more deals. Do a MFH first to take care of your housing. Then take a look at Texas tax sales. Do land that you can subdivide and sell lots. Don’t do house tax sales. Have to wait two years for ownership. Land is 6 months.

Do the tax sales on the side to generate easy money.  Keep plowing extra back into rentals.

Nate Mur · Answer

This is great! Short term sacrifices for long term gains.

Why not 5-10k for an RV? Or even a free one if you can find it. It just needs to be weatherproof with functioning appliances, barely needs to be towable.

Account for closing costs with the 50k needed for the flip. No taxes unless over 250k/500k or has that changed recently?

If I were to be approaching this strategy: I'd hold on the RV part, it works great until one day it doesn't. Split the profits and buy two flip houses (depending on payments) flip one and rent, then flip the live in.

There's so many options here!

Wanting to sell!!! How do I use my equity for my first investment? Should I?

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