Moving into our rental considering FSBO of our primary

[Karl Sanft]

Hi BP, longtime forum reader first time forum poster. We live in Vegas and we're planning to move into our rental property and sell our primary residence while the market is still up. Word got out about our plans and some friends and a neighbor have shown interest in buying - even if either party doesn't buy our house I'm considering FSBO to maximize profit from sale to reinvest in more rental property. Thoughts?

[Bill B.]

I did exactly that last August so I could live in the rental for two years before selling. I got a solid contract off the internet and used fidelity national tile on rainbow, they too were awesome. 

I didn’t try too hard, I mentioned it to a few friends and they mentioned it to a couple. A friends parents were looking for a single story  car garage house with a pool and a deal was struck. I made the price attractive and the deal a little less negotiable by simply stating a “net to me price”. 

Honestly I don’t know if I got any more than I would have with a realtor but anything I didn’t save my friends parents saved instead. Unless you price it perfectly and find buyers who aren’t going to want some of that savings, or already have a realtor you might end up saving 1%? Maybe 2% compared to the realtors that will list for 1.5%. If your house is over $400 or $500k and you like meeting new people, give it a try. I don’t think I would have bothered on a $200k house. 

Ps. Remember if you’re going to sell the rental eventually, you have to live in at least 2 years and then you’ll save capital gains tax on the percent time it was your primary, not 100% like you would if it was your primary first.