Nashville - I think I have a good problem to have...

[Paul Lange]

Hello,

I have recently started listening to the BiggerPockets podcast and love it.  I've already learned so much in my short time and am putting my ducks in a row to make a big time decision.   As you say - there is nothing without ACTION! 

Two years ago I purchased a town home in a booming area in Nashville, TN.  My intention has been to live here and then rent it out when I am ready for a more permanent home, as it is in an area with high demand (including a pool and workout facility).  However today I received something  very interesting in the mail, a letter to buy my property.  I have about 100k in equity in the home right now based upon their MAX offer as stated in the letter.

But here is the kicker, do I want to sell? I within the last week received approval on a HELOC based upon strategies I have heard on the podcast with the intention of trying to flip a home and get my real estate career started. I recently found a partner in the area to work with and we have been searching for deals and discussing how much money we would be willing to put together.

What would you do, is this a good problem? Take the cash and forget the HELOC or keep it as a rental for the future and leverage myself further? If I sell do I need an agent? Do I pay commission for somebody coming to me to buy? Thanks for the help you all are great!

[Russell Holmes]

@Paul Lange don't base your decision to buy or sell on receiving the letter. That is likely from an investor who has seen from public record that based on your original purchase date and original mortgage, you likely have equity. Equity only means that you are free to negotiate price within range of your equity as the proceeds would at least cover your mortgage. They are coming to you hoping to find a deal, simply put. If the property is in good shape, check with a local REALTOR to see what it's market value may be if listed and base your financial decision to sell or hold on the amount you could actually sell for, not what the letter in the mail offered. If that offer happens to be nearly market value and they stick with that offer, you could likely sell to them with an attorney and no agent commission. My guess is the letter offer will be at least 20% below market value, in which case paying a commission on full value sale is worthwhile. But truly consider what you'd buy next if you sell, potential heloc usage, appreciation, and cash flow if you keep it, and all of the other variables. Don't sell your cash flowing property just because you got a letter from someone who wants to buy it! If it's a good property, there are probably a hand full of people here who'd happily buy it too, but that doesn't mean you should sell, oftentimes the opposite!