Am i wrong? Thinking this is the best direction for this property

[William Huston]

Hello All, 

I am trying to determine if I am going the best direction with this property I own in my portfolio. My ultimate analytical understanding is its best for me to just sell it and move on from the property. 

I am located in Florida, the house in this discussion is located in Colorado. 

The property is a 2/2.5 Townhome which i purchased in 2009 for $49,000 with VA 0% down loan. At the time it was my primary residence while stationed in the military and when i received new orders in 2014, I turned it into a rental and rented it out until 2017, which the property along with 81 others caught on fire from forest fire and burned down.

Finally in January of 2021, the property has finally been rebuilt after many hang-ups and turned over to me.

Prior to the Fire, the property rented out for $1050/month, HOA was $205/month, Property Taxes was $273/year.

Since the Fire, the property is estimated for $1135/month, HOA is now $325/month, Property Taxes have increased to EST. $894/year due to new rebuild changing the taxes.

The estimate to sell is 210-230k, most recent similar rebuilt property sold for 210k, but was sold prior to completion of rebuild, so i expect it was sold to investor at a discount. fully remodeled similar property went for 230k in November. 

Everything inside of me is saying the best route to go on this property is to sell it, because I'm told by my accountant that I would be exempt from the long term cap due to property being destroyed and rebuilt. 

I've been personally renting and hoarding about 150k in cash for the correction in the market. Im thinking about selling the above property, take the 170-180k profits and combine it with my other cash to purchase another property or two in 2021. I am just looking for input to make sure im not overthinking something or missing something. It would also be nice to not have a property out of state, so i can stop filing taxes in Colorado. 

Everything is telling me to

[Kevin Hunter]

@William Huston, what are your long term goals? Additionally, it would probably help folks to make a recommendation if you provided some numbers. I understand you bought it for 49K VA, so my assumption is you owe about 35K on the loan. All that said, I also don't know what the interest rate is. For this post and bc you got the loan in 2009, I guessed at 5%. That tells me that your mortgage, principal interest and taxes is now (after the tax hike) about 270 per month. Add in 325 for HOA, 50 for insurance, 100 for PM, 50-100 for repairs, CAPEX are nil because the condo is brand new,(but you should plan for them anyway) and one month per year of vacancy, it looks like you will cash flow $400-ish per month on the property. Now you just have to make sure you can take the 180K and cash flow more than that. If you can, then sell and move on. If you can't, then keep it and enjoy the cash flow. With 150K in the bank for your next investment, do you need the 180K. Again, I don't know any of these answers, but you can answer them. Good luck and let us know what you decide!