To sell or not to sell

[Andrew Morales]

I’m having a hard time deciding whether or not to sell a live in flip. We’ve asked around and have been told there will be as much as a 10% correction in the next year or so in Salt Lake City Utah which would wipe out the profit we’ve built up.

We bought 3 years ago and put in 95k in repairs and 27k in interest and fees on the mortgage. Our interest rate is 3.12% on a 15 year and we pay 1700 a month plus 300 a month in utilities. In the next 7 years we’ll need a new roof and siding. We would rent it but if the kitchen sink clogs it floods a downstairs bedroom and tv room and I don’t believe it would cash flow in either case.

If we sold today at 360k after real estate commission and paying off the mortgage we’d walk away with 143k which would be a 21k profit. We’d go and live in student housing for two years (I’m a grad school student) which saves us 1100 a month compared to staying and I’d reduce my commute by about 1.5 hours each day.

we’d take that 143 and pay off all our debt and have some seed capital for the next project.

What makes me hesitate is that we have 12 years left on the mortgage and I don’t think I can get that interest rate again for a while. Part of me wants to rent it out at a wash and start saving for the siding/roof and risk that it floods. The other part of me wants to take the lessons learned and prepare for the next project while living debt free and reducing our monthly expenses. We are totally at a loss as to the best course of action. Please help!