Sell Home To Reinvest?

[Gunnar Linden]

Hello I bought my first house a few years ago. It has almost doubled in value (recent appraisal) due to updates and the market overtime. My overall goal is to get cash flow to leave my w-2 job one day. At first when I was looking into real estate investing I thought take a HELOC out and use as a down payment and rent out my primary residence and start working on another property. (I am not super handy I would have to contract some things out). Then I looked at how much my house has risen and now am leaning toward selling.

If I sell I could reinvest the cash into another rent ready home and still have funds leftover for the next project. The pro I see is that I would not be using borrowed money (the HELOC) for the 2nd property but my own money.

Real estate I have been working a little on the side to learn the buisness but 95 percent of my income is from my w-2 job. I have learned a lot and cash flow is my goal. I feel I should sell and wait for an opportunity or deal that fits because the market is high right now.

[Joe Villeneuve]

Originally posted by @Emily Hill:

@Gunnar Linden Long term, your home will appreciate even more and you will wish you would’ve held on to it. My dad bought his home for $80,000 in 1990 and we sold it two years ago for $500,000 and mind you the home was outdated too. Hold onto your home and use your cash to buy another investment property or do a heloc. 

Appreciation isn't based on equity, it's based on value.  If he puts that value in another property...plus, he gains equity from two properties instead of one.  That current equity has the same "face" value where it now or in a different property.  The investment value is greater if it can be moved to two properties instead.