BRRRR WITH LOTS OF EQUITY

[Dekel Saati]

Hello BP people,

I have a few houses that I am remodeling, and a couple of them just completed,

The area through the last year gained a lot of equity, and I questioning myself what's the best if to rent or sell, as we know many people always end up sorry when they sell their property and as warren buffet says HOLD IT FOREVER!

Here is an example of one of the homes:

Purchase price 35k

rehab cost 45k

rents are $950-$1000 (with a potential of increase in the coming years) Although it's maybe taught to find the perfect tenants sometime.

ARV 170K, when I first started the rehab ARV was more like 120k

Let's say I will rent and refinance the property (5% mortgage rate) and pull out 100k. Then, after all the expenses include management, I will net about $250 a month. $3000 a year.

Meaning that on the 70k equity (less 12k if I sell after agent and closing), I will only make about 5% on that money.

What do you think is best to do? Sell it and leverage my money on "subject to" deals or maybe a multi-unit? Or rent the property? since my final goal is cash flow.

I always wondered what people are doing in case their rental property gained a lot of equity, and of course, it also depends on if I have a better place to park the money. Still, if I rent the property, then there will be expenses to fix it again, and it might lose some value plus if the market will go down.

I have five properties with a similar situation, definitely a good amount of equity there.

Thank you all for reading, and I appreciate your opinion in advance!

[Jaysen Medhurst]

Sell all day long, @Dekel Saati. This property isn't going to cash flow at a 75% LTV. That mortgage payment will be ~$685, then add in repairs, CapEx, vacancy, management, taxes and insurance...

Take your gains and re-deploy your capital where you'll see some continuing returns.

[Dekel Saati]

Thanks a lot, @Jasen Medhurst. I'm leaning towards that option. I would love to get other feedbacks, if any, from others.