Sell Current Rental SFR for More Rentals Faster?

[Jason Jones]

Hello,

The question is in regards to opinions on whether to sell our first SFR for a large amount of equity money from it to be used to acquire multiple more SFR or duplex/triplex faster....or keep the current SFR as-is right now and let it ride slower.

We moved out of our residence house in the Twin Cities area and into a new residence house. The old house has become the SFR and is currently rented out until the end of July 2021. It pulls $2,150/month right now as it rented out during off-season, but during on-season good rental time of August/September the going rate for the area is about $2,300/month would be anticipated.

The SFR will be 100% paid off bank loan, free and clear in 5 months time. I have a recent Realtor appraisal of it being worth $440k if sold, and in talking to another Realtor he said I could expect to pay with him all fees from him and bank and everything else about 8%. So that would be about $405k in free and clear money to us. We would easily meet the rule of having lived in the property 2 out of the last 5 years and would avoid the capital gains taxes scenario.

If we keep renting out the SFR past July 2021 we would get a much larger cash flow per month than any normal scenario, main reason being is that the bank loan will be paid off 100%. But the money needed to acquire another property or two will come much slower logically it seems as we would then have to save about $1,500 per month (would earmark money from the rest of the monthly rent for CapEx and other expenses) and it would take a while to get enough for a new down payment and also repairs costs for a new rental. Not all that super interested at the moment of looking at high interest hard money or private money.

To me it seems to make more sense to sell the current SFR and get around $405k to then buy new rentals and afford their repair costs too, avoiding needing to use hard or private loans. I would scale up faster for money coming in overall and get more properties faster it seems. Looking right now to have between 5-10 doors I think...I'm open to SFR, duplex, triplex right now I'm thinking.

Thoughts?