All Forum Posts by: Account Closed

Thanks, Joe.  This is kind of what I was thinking but I hoped there was a simpler solution.  Both properties have close to a year left on their leases.  Hopefully I can buy something else properly in the meantime to get some experience.

@Tyler Gibson I probably have room to increase rent on the condo when the lease is up.  I think I'm doing pretty good with the house.

@Mark Bosworth That's a great question.  I assume with more experience I could do much better with the capital.

@Mark Bosworth Some quick math tells me that if I were to sell the house I could pull out approximately $55,000.  At 3% per year that's about $138 per month while the property is currently increasing my net worth by $230 per month.

@Tyler Gibson  I've looked at refinancing the house.  It looks like I can add $160 per month of cash flow.  The current loan has 24-years left at 4.75%.  If I were to refinance with a new 30-year it looks like I could get a 4.50% rate for approximately $2,400 in closing costs.  Interestingly this only changes the increase to my monthly net worth by $9 because the mortgage paydown would reduce.  I'm struggling to determine if this is worth it.

The condo was refinanced in 2012 at 3.75%.  I think it would be tough to find too much money there.

I own a condo I purchased as my first home in 2008 and a single family home I purchased to move into in 2013.  Neither were purchased as investment properties.  I moved out of the second property in 2017 and I have had good luck keeping the properties occupied using a local property management company.  The condo value was less than I purchased it for when I moved out which is why I kept it to rent out.  It was so easy to get tenants that I decided to do the same thing with my previous home.

I've started learning more about analyzing real estate deals and realized that while I'm paying down the loan on both properties and they are appreciating, I have negative cash flow on each.  I recently read the The Book On Rental Property Investing by Brandon Turner of Bigger Pockets and I know have a much better understanding of what these properties are actually costing me.  The cash flow on the condo is -$125 per month and it's -$110 on the other house.  This includes budgeting for vacancies, capital expenditures, repairs etc.

If you count mortgage paydown the condo increases my net worth $155 per month after negative cash flow and the house increases my net worth $230 per month after negative cash flow.

I would like to do more real estate investing and I can't decide if it makes sense to keep these properties or to sell them and start over.  I feel like it makes sense to keep them because I will lose so much to real estate commissions when I sell and closing costs when I buy a new property.  That being said, there's so much to consider I'm not sure where to start.

Please let me know what other information I can provide.  Thanks in advance for your help!