Starting Out
Market News & Data
General Info
Real Estate Strategies
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/hospitable-deef083b895516ce26951b0ca48cf8f170861d742d4a4cb6cf5d19396b5eaac6.png)
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/equity_trust-2bcce80d03411a9e99a3cbcf4201c034562e18a3fc6eecd3fd22ecd5350c3aa5.avif)
![](http://bpimg.biggerpockets.com/assets/forums/sponsors/equity_1031_exchange-96bbcda3f8ad2d724c0ac759709c7e295979badd52e428240d6eaad5c8eff385.avif)
Real Estate Classifieds
Reviews & Feedback
Updated over 4 years ago on . Most recent reply
![Dennis Soto's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/1816341/1621515822-avatar-denniss154.jpg?twic=v1/output=image/crop=505x505@61x2/cover=128x128&v=2)
Should I continue holding an appreciated property?
I am an amateur when it comes to real estate investing. However, in 2012 I made a homerun deal that if managed properly it can get me to my new realized dream of becoming an actual investor. Here's the deal:
I bought a single family 1900 sqft, 3 bdrm, ranch-style house with an attached mother-in-law suite. I converted the property into a 2-family 5 bdrm (2 & 3) which I house hacked for 3 years. The purchase price was $77,500; I put 3.5% down; did a 203k loan which got me $30,000 from the bank for the rehab and put $10,000 out-of-pocket for the balance. All together i was $12,700 out-of-pocket and had a mortgage of about $108,000.
In 2015 the house appraised at $185,000 and I eventually refinanced for $130,000; I got my original investment out of the deal and use the remainder along with a VA loan to buy my primary residence. This property now cash-flows close to $1,000/mo. which is helping me pay down both my mortgages.
The property value is now $285,000 and I owe about $118,000 on my mortgage. Would it be smarter to sell the property, cash-out big and use the capital to invest in other properties? Or does it make more sense to refinance again and have less capital to invest?
My concern is that a refi would drop my cash-flow/equity and I'm not sure if the current market is the best time to invest.
Most Popular Reply
![Bob Okenwa's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/678082/1621495285-avatar-bobo80.jpg?twic=v1/output=image/crop=1429x1429@257x581/cover=128x128&v=2)
Let's do some very simple, very hypothetical math:
If you sell for 285k, let's say you pocket 250k after closing costs, fees, and commissions. Paying off the remaining mortgage of 118k leaves you at 132k before taxes. I'll leave taxes out of it since I'm not an accountant and am not familiar with your financial situation.
Measure that 132k cash vs the 1k per month you're currently cash-flowing. You cash-flow 12k per year at this current clip without appreciation being factored in. If you never cash flow a cent higher than this, and have no CapEx or repairs, it'd take 11 years to earn 132k.
A bird in the hand is worth two in the bush. I'd sell and take that hypothetical 132k profit and 1031 it into more properties or a larger property if it would earn me more cash-flow. Think of it like Monopoly and turning houses into hotels.
Every market is good to invest in if the numbers make sense. You just have to be more diligent in an up market vs a down one.