First timer question

[Brandy Horkey]

I am looking to do my first BRRRR but I have a strange situation so I am not sure which route to take.

I own a 3/2.5 condo just outside Universal Studios in Orlando. Originally, I was just going to sell it and buy a house outside of town. My bf has been asking me to be patient and hold off on buying another place for a little while and just live with him until I find what I want, which is fine but here is my quandry…

I can sell my condo and use that money to pick up another house, sure. BUT, I would rather pick up a rental. So I feel like I have 2 options. 

1. Keep my condo and pull out the cash. My mortgage is very low and I have just remodeled the kitchen and remaining upgrades will cost less than $5k. A refi would get me enough to pay off the existing mortgage and upgrades and leave me about $100k to invest in another property. The problem is that my HOA is so high that I will barely make any money off the rent. I will make money but not much.

2. I can sell my condo, and have more cash in hand so that I have more flexibility on what I can buy to fix up. I will be able to pick up something that throws more money my way and will allow me to get into a second house quickly. 

The first option gets me experience right out of the gate but I fear that with not much cash flow, it could hinder bank loans but I shouldn’t be showing any negative cash flow. And I could have 2 rentals with in 6 months 

The second option could potentially get me 2 rentals within 1 yr with better cash flow but now I don’t have any assets(my condo) to start. 

I’m sure I have left out a lot of details that will help but I would love to get some input on how I should handle this situation. 

Thanks!
 

[Tyler Gibson]

Quote from @Brandy Horkey:

I am looking to do my first BRRRR but I have a strange situation so I am not sure which route to take.

I own a 3/2.5 condo just outside Universal Studios in Orlando. Originally, I was just going to sell it and buy a house outside of town. My bf has been asking me to be patient and hold off on buying another place for a little while and just live with him until I find what I want, which is fine but here is my quandry…

I can sell my condo and use that money to pick up another house, sure. BUT, I would rather pick up a rental. So I feel like I have 2 options. 

1. Keep my condo and pull out the cash. My mortgage is very low and I have just remodeled the kitchen and remaining upgrades will cost less than $5k. A refi would get me enough to pay off the existing mortgage and upgrades and leave me about $100k to invest in another property. The problem is that my HOA is so high that I will barely make any money off the rent. I will make money but not much.

2. I can sell my condo, and have more cash in hand so that I have more flexibility on what I can buy to fix up. I will be able to pick up something that throws more money my way and will allow me to get into a second house quickly. 

The first option gets me experience right out of the gate but I fear that with not much cash flow, it could hinder bank loans but I shouldn’t be showing any negative cash flow. And I could have 2 rentals with in 6 months 

The second option could potentially get me 2 rentals within 1 yr with better cash flow but now I don’t have any assets(my condo) to start. 

I’m sure I have left out a lot of details that will help but I would love to get some input on how I should handle this situation. 

Thanks!
 

 My two cents is that you should sell the condo. Condo fees are bound to continue to go up because of the new legislation here in Florida. You're likely better off selling it and doing a 1031 exchange into another property. Unless you've lived in it two of the last 5 years, in which case you would not need to do a 1031 exchange. What you do with the cash after you sell is a bigger question. While looking for a property you could put it in a high-yield savings account that gets you 3 to 4% so that it's not sitting stagnant losing value due to inflation.