Investor · Columbus, OH · Member since 2015 · 61 posts · 29 votes
So my first duplex deal turned out to be actually pretty good, only had it for two years, paid in the 150s for it, owe 138,000 rents started out at 900 got them to 1,100 , that covers the mortgage, The exact same duplex next door sold for 211,000 it’s not even fixed up like mine, ! By looking at the comps I should be able to get 220,000!
I’m curious about selling but in the middle with it, I know it depends on goals, I’m more of a passive guy, wanted to know what others investors would do? Would you sell?
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
7y
I would hold because even with $80k appreciation you're not going to walk away with enough cash to make selling worth it at this point in my opinion ($80k less the $20k you put into it=$60k, less costs of sale ~$15k=$45k, less cap gains/depreciation recap ~$20k= "only" ~$25k true net profit in your pocket (rough numbers of course and assuming you won't do a 1031, but I think you get the point, not quite enough to justify "cashing out" just yet)).
If you hold you'll likely realize far greater returns on it over time. You might be able to pull some cash out with a refi but factoring in closing costs, a higher rate, and a higher payment that will eat into your cashflow, it's probably not something I would do at this time personally. Not getting over-leveraged and using the cash flow to build reserves/ save for a down payment on the next deal seems like the prudent approach to me in this situation.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
@Michael Conrad how long will it take to get rent to $1600?
Right now it's a loser as a rental, but has appreciated nicely, so I would sell. I want cash-flow from the get go, so losing money for years isnt going to get me to my goal
Rental Property Investor · Chattanooga · Member since 2018 · 137 posts · 142 votes
7y
I would get the money out of the place that I put in and lock in on a long term loan (30year) and keep it for long time. Then got find another one if that is what you enjoy. (This concept has done me very well)
Investor · Columbus, OH · Member since 2015 · 61 posts · 29 votes
7y
@Joshua Watts
This is what I want to do, is to take at least 20 to 25gs out, what would the property have to appraise for in order for me to do this? I think the LTV has to be 70percent
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
7y
I would hold because even with $80k appreciation you're not going to walk away with enough cash to make selling worth it at this point in my opinion ($80k less the $20k you put into it=$60k, less costs of sale ~$15k=$45k, less cap gains/depreciation recap ~$20k= "only" ~$25k true net profit in your pocket (rough numbers of course and assuming you won't do a 1031, but I think you get the point, not quite enough to justify "cashing out" just yet)).
If you hold you'll likely realize far greater returns on it over time. You might be able to pull some cash out with a refi but factoring in closing costs, a higher rate, and a higher payment that will eat into your cashflow, it's probably not something I would do at this time personally. Not getting over-leveraged and using the cash flow to build reserves/ save for a down payment on the next deal seems like the prudent approach to me in this situation.
Rental Property Investor · Kalamazoo, MI · Member since 2018 · 117 posts · 235 votes
7y
@Michael Conrad
It all depends on your goals. Multi family is always super expensive and high value at the top of a real estate run. Catch it on the backside when the market softens and newbies get out and you’ll be able to buy three ones what you have.
Investor · Columbus, OH · Member since 2015 · 61 posts · 29 votes
7y
@Steve K.
This hits it dead on, and makes sense! Too early to sell, and it’s crazy I already knew in my head, wait hold up, taking out the all the costs, it would be a lot less than 80k, but for some reason it’s easy to ignore that,! Yes refinancing wouldn’t be worth it right now found out!