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Updated 3 months ago on . Most recent reply

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Gabriella Pellolio
9
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1st Property - Built Equity, What’s Next Step?

Gabriella Pellolio
Posted

About a year ago we purchased our home in Marin County. We were able to buy low in a good neighborhood since the home was in need of some work, mainly needing cosmetic work and some deferred maintenance. We have been living in the home and slowly doing work as we can. The home value has increased even though we haven’t had it reappraised with the work we have done so far. We currently have about 200k equity. Our mortgage rate is high at 6.75%. Given this and what I’m seeing homes around here rent for, there wouldn’t be much monthly cash flow if we were to rent it out today as a LTR, but there is the opportunity to grow equity. Unless we tried a MTR, this might bring opportunity with monthly cash flow. I want this to become a rental property and would like to begin investing in real estate, I am not sure best approach. Marin is expensive and though we want to live in Marin, I think it’s smart to look at other markets for investing. How do we make the most of where we’re at and these needs?

Some ideas and questions I have around best approach:

Do we continue to put our own money into these repairs to see through the work on the home or is there a loan or HELOC that should be considered instead?

Should we refinance now if rates decrease even just slightly so we pay a lower monthly while we see through these repairs, then once repairs are complete have home reappraised and take out this equity to buy next property where we would live while renting out our current home?

Do we take equity out now to buy next home, rent this home now, and save MTR OR LTR cash flow to do repairs in between renters?

Do we continue to live in this home, take out a HELOC or cash out refinance to purchase a rental property, and once have more equity down road move out of our current home and rent this as well?

Appreciate your insights, thank you!


  • Gabriella Pellolio
  • Most Popular Reply

    User Stats

    1,038
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    Jake Andronico
    #4 House Hacking Contributor
    • Realtor
    • Reno, NV
    834
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    1,038
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    Jake Andronico
    #4 House Hacking Contributor
    • Realtor
    • Reno, NV
    Replied

    @Gabriella Pellolio

    Congrats!! That's a great position to be in. 

    I grew up in Marin and moved to Reno, NV to live and invest. 

    There are a ton of markets to choose from, of course. Marin is a phenomenal place to build equity, and eventually use that equity to create cash flow. 

    Answering those questions always comes back to a single question in my opinion: What's the end goal? 

    • Jake Andronico
    • 415-233-1796

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