Denver market....

[Megan Arzt]

So I currently own a place in Golden Colorado. It is a townhouse that currently cash flows about $500 a month. However since I bought it in 2010 and that market has gone through the roof I now have over $100,000 worth of equity in it. I have a couple deals that I am looking at in my local market. My problem is coming up with the down payment for them. My original thought was to do an investment HELOC on the CO place. I am running into troubles getting that. So my question is, should I sell my place in Colorado in order to potentially buy three places here, or I just hold on to that Denver one? I guess part of my question, is what do people think the Front Range Market is going to do? Will it continue to go up are we at a peak and I should get rid of it and reinvest elsewhere? Thanks in advance!

[Charlie Fitzgerald]

The only time I see "selling to buy" as a viable strategy is if there is some degree of certainty that my sell property is going to suffer some type of economic set back, and my buy properties are going to return at least as much cash flow to me (including the recovery of sale costs and loss of cash flow from that asset) , appreciate at the same rate or above as the asset I sold and the by assets are NOT going to be exposed to the same degree of potential economic set back as the sell property.  Other wise, you're just spinning your wheels and changing addresses for no real economic benefit.  If you have a $100,000 of equity in the Colorado place, cash it out and fund some more purchases while retaining the asset.  If you can't get a cash out loan, then use the asset as a cross tie to buy additional rentals.  Selling to buy in most cases is trading fish, to get worms, to go fishing...