SELL or Keep and Cashflow

[Nathan Anderson]

Hi there!  This is my first post but long time listener to the podcast. My wife and I are having a hard time deciding on whether to sell our home and take a massive tax hit. Or keep it and cashflow it. It is a single family home in Park City, Utah that we purchased in 2020. We already remodeled and then did a refi to pull out our downpayment and the cost to remodel. We owe just under 1M on it and it would currently sell for 2.3-2.5M.  In order to qualify for another property we just closed on we needed to either sell or have a lease in place and I thought it would be simpler and easier to get a lease. We have a lease secured for the next 14months at 8K per month over our mortgage. I would say that worst case we should be able to get no less than 5k per month positive cashflow if the market cooled a bit when it's time to renew this lease. The idea of having a lump sum of cash is awfully comforting going into this next remodel not to mention the current economic outlook. On the other hand cutting a 500k check to the IRS also makes me want to vomit. :) I was just wondering if there is a formula/ approach to how much of a gain is worth walking away from solid cashflow etc?  Appreciate any insights and opinions. Thanks Nathan 

[Leo R.]

"please plan better next time"?  Haha; the guy got to 1.3 million in equity and 8k/month cashflow in 2 years...I'd say that's pretty excellent.

He asked a legitimate question about a topic that is nuanced, and which lots of people don't understand very well, but I don't see any evidence that he "didn't plan well" (quite the opposite, actually).