Advice: should I sell my house?

Question

ok so I want to get into REI. I don't have a network or team. Wholesaling sounds interesting but in gone a lot for work. So I would definitely need a team to make that happen.

So a little background on me. 35. Recently divorced. I own a waterfront home with a boat lift in Cape Coral fl. This is the area I'd be interested in meaning southwest Florida.

Would it behoove me to sell my current home. In asking this I don't have enough equity to take a 2nd. However I owe 188 and could sell for about 240. (Zillow says 280. I doubt that) After all is said and done realistically I could walk away with $30-35k in hand.

Now if I did this I could potentially fha a MF and live in one while renting out the other. This would also give me some left for another cheap MF that I could go full rental.

I understand finding the right deals are paramount and have been vigorously looking. Down here tenant pays all utilities so that isn't a concern. I've found one 4plex that peaked my interest. 329,000 list. 4 2/2 885 sq ft. Agent says rents are at (3) 675 and (1) 575. Looking at comps for 900 sqft and 2/2 rent should be closer to 800. Not site why 1 is at 575. According to all numbers I've read on here this place will not cash flow. So kinda lost interest.

Basically what would be my best play? Saving down payment and continue living in my house or selling and expanding. If selling is your choice what method of investing would work best? Also my current income is right at 100k

Sorry for the long post wanted to give as much info as possible and I'm sure there will still be many questions.

Jordan Williamson · Answer

I have two duplexes in Cape Coral and live in one of the units (as you are suggesting) ; however, looking at the Cape market, very few even come close to cash flowing. The multifamily market is overheated right now in my opinion. Make sure to run your numbers. There's no sense in buying properties that don't make money.

Michael Corona · Answer

I am in a similar situation with my home.  I travel quite a bit for work and no longer live full time in the city where I own my home.  Its a tough market but I still have a good chunk of equity in my home. I am currently renting the home out for about break even, but I am contemplating selling the home and maybe buying up a multi-plex.  Not sure what I am going to do as my current tenants treat the house well and I don't worry about much, but it would be nice to have some cash flow.

Michael Seeker · Answer

Sounds like you're about 5 minutes from me!  That is quite small for a canal home and also not having a pool hurts.  $240K still might be on the low end, but you'd want to get a Realtor to run comps for you and find a good price point.

As for a strategy, you've got to figure out what you want to do and go for it.  Wholesaling is way different than flipping and both are way different from buy-and-hold.  If you're gone a lot for work, then it sounds like a nice duplex that brings in some cashflow would be a good starting point.  The great thing about MF properties is that when you get to the point where you want to move on, all you have to do is find a tenant for your unit.  There are a lot of nice 2-4 unit properties in Cape that you should easily be able to get into.  That would be my recommendation.

Michael Morin · Answer

That's exactly what I'm thinking. I'm trying to keep estimates on the conservative side. I'm thinking if I sell mine I would be able to basically buy 2 right away. 1 FHA as owner occupy and one conventional. Just where my brain is right now.

Michael Morin · Answer

My house is a nice house. 3/2/2. Not huge at 1453 sq ft but space is well used. Split plan with huge master. Large screened lanai on back. Dock with a 10k lift. No pool which is one thing that generally drops value. Garage is 2 car but oversized at 24x27 with an 8ft door. Garage floor epoxied. Replaced chain link fence with white 8ft PVC privacy. Sprinkler system. Laminate hardwood floors. Carpet in bedrooms. Could use stainless appliances and granite.  Brand new a/c system in aug of 13. House built in 03 I think up to latest hurricane codes with mitigation report. Shutters but they have to be out up not roll down. In se cape near viscaya and del prado. No bridges or locks.

Michael Morin · Answer

ok been a while since I've posted. Super busy. I have made the decision to sell my house. I have a realtor working on everything. When sold I will buy a duplex and pay off any revolving debt. The duplex will be bought on a 15 yr note which will hurt the current income some but will be paid off faster. I plan to do this 3 times having all rentals paid for in 15yrs. After doing this 3 times I will go back to buying a canal house for me to live in.

Michael Seeker · Answer

Have you thought about taking on a roommate or maybe using the house as a vacation rental?  I know lots on a canal go for high 100's in Cape Coral, so would it be worth fixing your house up to get more money out of it?  I feel like $300K is the low end for a dated canal house.  I'd be curious to hear more about your house (BR/BA, sq ft, pool/lift, etc.?) and what area it's in that you think it'd only bring $240K.

Michael Morin · Answer

thank you. Great article.  However I'm not really deciding between selling mine or renting it. My house would likely not flow cash to me. My piti is 1531. 3.75% so wouldn't get it lower. Maybe could rent it for 1800 so the numbers just don't work.

It's more about selling to gain capital or just continuing living there and saving for capital.  Wondering maybe what others would do or have done. If mine would flow positive I would do that in a heart beat.

Elizabeth Colegrove · Answer

Welcome to Biggerpockets!

Your sell or rent question is a hard one. Here is an in-depth article i wrote on the topic http://www.biggerpockets.com/renewsblog/2014/12/29...

Personally it comes down to a personal decision. My husband moves alot for work (active duty navy) so we buy personals that we turn into rentals and pure rental (rentals from day one). We had the option of selling our first house for a 30k profit but decided not because we would rather the cash flow and someone else paying down our mortgage.

Honestly it really comes down to a personal question depending on your goal, and desires.

Advice: should I sell my house?

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