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Updated almost 11 years ago,

Account Closed
  • Maryland
0
Votes |
2
Posts

Thinking of selling 4-plex, is this a bad time for me to reinvest via 1031?

Account Closed
  • Maryland
Posted

I bought a 4-plex in western ND in 2003 for $88,000. I've put around $50,000 into it between a roof, windows, carpet, appliances, etc. My Realtor thinks he can sell it for $325,000. I don't have a mortgage on it. It's bringing in about $39,000 a year before expenses. Expenses (taxes, insurances, management, etc) were $21,000 last year. I know it's a solid building, but I'm nervous about the oil boom going bust in 5-10 years. Even now, I've heard rumblings the market there is softening due to so many more properties being built.

Simultaneously, I also have a paid-off 18-plex in eastern ND. I paid $215,000 for it and it's worth $530,000ish now. I want to keep this, but have applied for a cash-out loan. I haven't heard back on that yet.

My plan was/is to take the money from the 4-plex (~$300,000) and put it into a 1031-exchange, and then take the money out of the 18 plex (let's say $200,000?) and put a downpayment on a larger building. We have around $120,000 completely liquid funds, and then a few hundred thousand in TSPs, IRAs, etc.

I'm not particular at all where I buy since we are military and move around all the time anyway. I would hire a manager certainly.

The thread about "no deals" on multi-family units has me a little afraid now. Am I being a fool to sell and refinance? ANY advice is appreciated. I love this area of investing, but part of me thinks my success is mostly from dumb luck rather than any particular skill, and I don't want to be an idiot.

Both my husband and I have stable jobs, making around $110,000 each per year when our housing allowance is included. Hopefully I included all the relevant facts. Any advice at all would be appreciated!

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