Increase Cash Flow with Refi or Sell with 1031 Exchange

[Rhonda Davis]

I am having a raging debate with myself over selling a condo using a 1031 exchange to buy a better cash flowing property – or – refinance down from 4.625% to 3.375% to get it better cash flowing.

The condo is in a very nice, expensive area but not the best for cash-flow which is less than $50/month. I used $150k from a 1031 exchange to purchase it in 2006. A few years later as the housing bubble burst it went down in value. It’s steadily going back up but would sell for about $75k less than I paid. Ironically, I would walk away with what I put in - $150k.

I would like to buy a SFH or preferably a duplex where the monthly cash flow could be about $150 - $200. Numbers from my banker show that a refi for 30yr fixed would result in me cash flowing about that same amount. But that is extending my debt and I am not sure it's the smartest thing to do.

It’s a good time to refinance. It’s a good time to sell. But it’s a bad time to buy. I feel like I have brain fog and keep going in circles.

I would greatly appreciate someone telling me how they would analyze this and what do they think they might do in this situation. Thanks in advance!

[Rhonda Davis]

The main thing really is cash flow. I could get more house for less money in PG County, than here in Alexandria. And in that area I would be cash flowing nicely. My place is nice and I've had no problems. Looking for more CoC ROI and not getting stagnated.

It looks like it's best to refinance now. At some point, I am still able to buy a place in PG County.

Thanks for the advise @Dave Foster