Should I sell our home?

Question

And move into my parents vacation home for awhile?  We have a small bit of equity in our home and should be able to sell our house and pocket 75k. The plan would then be to move 6 hours away to my dads vacation house and live there for free minus utilities, and then save up for something? The plan is to either find a investment house in the meantime or just save up for a place we really want to live at. I want to obtain as much cash as possible right now and keep an eye open for investment opportunities or for the next great deal for a new house for us. I’m thinking on staying at my dads house for maybe two years or till the market crashes if it does and then we can get a good deal on something we love. Only problem is our current house would make a great rental but the type that may get thrashed quick due to the price range and judging the other rental homes in the neighborhood. I’ll have the 6 hour commute back to work but it’s only 9 days a month so it not to to bad. So what do you guys think? Sell the home and cash out and live for free in a vacation home? Or rent the home and move, or stay status que?

Sarah Brown · Answer

Soooooo, you want an investment property, but you want to sell the property you have that could be a great investment?  Selling a house is EXPENSIVE!  By the time you pay closing costs, agent fees, repair costs, etc., you will be losing several thousand in your equity.  If your goal is to save, I think it would make more sense to rent your house out and keep the cash from renting in an account that you can then put toward your next investment down the road when you have enough cash. I would put a HELOC on the house to be able to give you access to the equity when you want it, without paying interest  before you pull it.  Don't let someone else's bad management of their properties scare you out of renting.  There are many ways to mitigate damage from tenants.

Ryan Howell · Answer

I would say to get real clear on your goals.  Decide where you want to be in 5 years, then align a strategy to get there.

I agree, you don't want to wait on a market crash.  99% of people who wait to do their first deal when a market crashes probably won't have the confidence to move forward when all society tells them real estate is a bad investment.  If you have a deal or two completed, you will then actually have the confidence to take advantage of the market crash, that's my opinion at least.

As far as the house you own...do you want to live there?  If not, sell it and use that cash to start investing.  If you do want to stay there, take out a HELOC to access that equity and then start investing.

As far as strategy, I would consider house hacking or BRRRR.  If you can live for free anyway, then house hacking may not be as beneficial.

Jody Sperling · Answer

Wow, Will, there's a lot of moving parts here, no pun intended. First thing that pops to mind is this: Don't count on a market housing crash, and don't try to time it. Suppose it went as you "predicted", and it's two years down the road and all you've done is save money for the crash. Well, your life's been less than memorable because you're traveling twelve hours round trip nine times a month, and there's no end in sight to that gimmick, which will exhaust you sooner than you realize.

You realize in those two years you haven't learned anything actually valuable because acting on what you've read, heard, discussed, and dreamed about is the only way to make it real and refine the theory into knowledge. It's a crap market so lenders don't want to help and you struggle to gain velocity, and even though you've got your safety set aside, you feel really scared because you keep reading about all the people who've lost everything in real estate because of whatever terrifying thing caused them to go broke.

One night, you're sitting out contemplating the state of your life and you realize that had you chosen to act two years ago in August of 2020, you would have a half dozen doors, cash flow of several thousand a month, and a net worth nearing a million dollars. It's painful to realize what you missed out on because you chose to let the fear of what a renter might do to your old house control your actions.

Best of luck! Don't be afraid. Be bold. Be wise.

Should I sell our home?

Most Popular Reply