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Updated about 7 years ago on . Most recent reply

User Stats

101
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27
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Megan Arzt
  • Investor
  • Moab, UT
27
Votes |
101
Posts

Best equity usage...1031, refi, HELOC, or nothing?

Megan Arzt
  • Investor
  • Moab, UT
Posted

I own 8 properties (11 rentals).  My first property in Golden, CO has doubled in value since i bought it back in 2005.  I now live in Moab, UT which is where the rest of my rentals are.  I'm trying to figure out the best plan for the Colorado property.  Some of the options I see:

A.  Sell it.  Keep the money that I've already made into a reserve account (I'm a little low right now) and take the capital gains and reinvest it in 2 properties either in Moab or somewhere closer to me.

B. Keep the property, but either refinance it (costs money and rates are higher) or get either a HELOC or Home Equity Loan, and then take the money and do what I mentioned in A. This would put me at cash flow zero for the CO property, but projections are that the Colorado market will continue to appreciate, so I would hopefully be getting that, plus some more reserves and 2 more properties.

C.  Do nothing....

I look forward to input as there is a wealth of knowledge on this site.  Thanks in advance!

Most Popular Reply

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4,424
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2,897
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Bill S.
  • Rental Property Investor
  • Denver, CO
2,897
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4,424
Posts
Bill S.
  • Rental Property Investor
  • Denver, CO
ModeratorReplied

@Megan Arzt I would make a twist on item A. Identify properties in your area and put them under contract. Then sell your Golden property and do a 1031 exchange into the new properties. You will postpone capital gains and likely increase your cashflow which over time will help your reserve account.

  • Bill S.
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