All Forum Posts by: Abigail Gibson

Hey all - first time poster, long time listener. 

I would like to expand my portfolio but I have a hesitant partner so I am working on doing this slowly. I own a rental home, a personal residence that I turned into a rental, with a 2.75% APR 15 year mortgage.

My current cash flow is around $375, but once the house is paid off, in about 7 years, I will cash flow around $1200. 

I put $100,000 down on the house and did approximately $10,000 in repairs going into it. 

My question is, should I sell the house and roll $135,000 into a four-plex that cash flows around $800 a month? I would be putting myself into a 30 year mortgage, rather than a 15 year, so I would achieve the higher cashflow number at a much slower rate. I have suspicions that the rent is undervalued in the 4-plex, but where they currently stand my cash-on-cash numbers are between 6%-8% return depending on if I have to put 20 or 25% down. If I did this, I guess I could take the remaining $65,000 I am going to get from the sale of the house to purchase a second rental that could also cash flow. 

As I have started running numbers, I have found that I am stuck in the classic analysis paralysis more than I thought...

As a local agent, I am seeing a lot of the same things that @MattPayne talked about. We have a huge influx of people from Florida (which isn't new), California (which is new), and cities in NE like DC and New York. People moving from these more expensive places don't seem to have a lot of issue with paying prices that only two years ago would have seemed outrageous. Living north of town in Weaverville, the value of our home has increased $100,000 in two years since it is on an acre and a larger family-sized home. I am unsure if the evaluation will stay this way into 2022 when people are vaccinated and are drawn back towards city life, but it's nice for now. 

My firm is are seeing A LOT of activity in the Burnsville and Spruce Pine area, and other smaller outliers in Waynesville, Maggie Valley, and Black Mountain. 

The low inventory issue at least partially stems from the fact that those who live here can sell a house in a few days, but don't feel they can find a new one at any sort of a reasonable price. I know numerous people in my age group who have young, growing families that need to move out of town to get more space, but are afraid they will end up in a situation where they can't find a house they can afford. We moved to Weaverville from West Asheville 3 years ago and couldn't afford Woodfin at the time. If we were trying to do that this year we wouldn't be able to afford Weaverville. 

Will the ending of the CARES act lead a large amount of people to list and relieve some of the pressure? Maybe, but I am not convinced that the backlog of people actively looking to purchase won't fill that gap quickly. I have numerous buyers on hold just waiting for properties to come on the market. The buyers are there, it just seems that at this point the sellers can't afford to move.