Newbie from Vancouver, WA

[Nicole Dennis]

Hello!

My name is Nicole and I am a full-time special education teacher. I stumbled upon Bigger Pockets a couple weeks ago when I decided real estate was going to be my exit strategy from teaching and found the podcast. I have very little experience in real estate and am reading/listening to as much as I can on Bigger Pockets to learn as much as I can. I purchased Set For Life and through reading discovered that I am very solidly in Part 1. My long-term goal is early retirement through rental properties, most likely following the BRRRR method. I would love to network in Vancouver, WA!

Interestingly enough, I do actually have a rental property in Midland, TX. This happened accidentally in January when my husband and I moved to Vancouver from Midland and it was faster/cheaper for us to rent it. Currently, we are breaking even after the property management fees. I am looking into whether I should refinance or 1031 exchange it for something local in Vancouver. 

I have a ton to learn and am thankful I found this community to help guide me. I love everything Bigger Pockets is doing and am very excited to start my real estate journey!

Thanks!

Nicole

[Dave Foster]

@Nicole Dennis, Breaking even in a sellers market is kind of a bummer.  But in order to determine if you can benefit from a 1031 exchange you need to get an accurate understanding of your gain position.   To find you're adjusted cost basis take the purchase price of that property and add the cost of any capital improvements and subtract depreciation that was taken or could have been taken.  The difference between this amount and your estimated net sales price would be your probably gain/loss.  If there's a significant amount of gain it could very well be worth your while to sell and do a 1031 into another property closer to you or with a better cash flow.

However, one more thing to check out - You mentioned that you moved from this house in January.  If you have lived in that house for 2 out of the previous 5 years you can sell it using your primary residence exemption of sec 121 and take up to $500K in gain tax free.  This might be the best option of all since it's tax free and there are no reinvestment requirements - only that you have lived in it for 2 out of the 5 years prior to sale.  You will only have to recapture the depreciation from the time you moved out which will be minimal.