All Forum Posts by: Alex Houser

Thanks for all the responses! For some added clarity:

This was the first investment property I purchased, and now own a few others which are also cash flowing. Obviously, I'm getting a great return on this, and the interest rate is locked at 3.25%. There are a few reasons why I'm considering selling: 1.) Pay off $70k of student loans between my wife and I which cost us $1,200 per month in minimum payments and 2.) Gain $150k of capital in preparation for a market that I expect to be...choppy...and 3.) $600k for this property is about $50-$75k more than what others have sold for in the area and I don't expect that to be available again for another 18-36 months. 

Also, I live in NJ - I may be wrong, but from what I understand, capital gains is exempt for the first $250k every two years. If that's true, I shouldn't have to take a tax hit on the sale. 

So you see what I mean:

Option 1: Keep a great, cash-flowing, appreciating asset

Option 2: Sell while the market is high, pay off all debts, and prepare capital for similar / alternative investments. 

So I'm looking for opinions / advice / tips on a duplex I house-hacked back in 2018. Here are the numbers:

Purchased for $349,900, plus $25k in renovations.
Refinanced for $425k (currently owe $375k)
Currently rented for $4,700 per month ($1,500 per month cash flow after expenses).

I have a buyer willing to pay $600k in cash for the property, which would give her a 9.5% cap rate on her investment. In turn, this would allow me to pay off the mortgage, pay off about $70k in student loans, and still have $150k left to purchase another investment. On the other hand, this property makes me $18,000 per year in passive income.

Should I sell or hold??

Thank you!!

Alex

Hi, there! I house-hacked a duplex back in 2018, and now I'm debating if it makes sense to sell. Numbers:

Purchased for $349,900, plus $25k in renovations.
Refinanced for $425k (currently owe $375k)
Currently rented for $4,700 per month ($1,500 per month cash flow after expenses).

I have a buyer willing to pay $600k in cash for the property, which would give her a 9.5% cap rate on her investment. In turn, this would allow me to pay off the mortgage, pay off about $70k in student loans, and still have $150k left to purchase another investment. On the other hand, this property makes me $18,000 per year in passive income.

Should I sell or hold??

Thank you!!

Alex H from NJ

Thank you for the reply, @Andrew Smith! I'd certainly be interested in running the numbers!

That’s really helpful, Bryan, thank you for your reply!

Hey everyone,

Does anyone have any experience installing solar panels on a rental property to offset the cost of electricity? 

I currently own a "house-hacked" duplex where my wife and I live on the first floor and the second floor is rented. The issue I'm facing at the moment is that there is no gas to the house - everything is electric, including heat and hot water. There are gas lines in the street, but obviously the cost of upgrading the home to gas is considerable (albeit probably less than installing solar.) By way of reference, I'll share that the 3 bedroom, 1 bath apartment we rent goes for about $2,000 - $2200 market rent, and the electricity bills average between $400 - $500 per month. This cost is considerable, and although my tenants pay for their own utilities, I'm wondering if there would be any benefit to installing solar.

Some questions I'm asking myself (and others) are

• Is there any potential revenue creation from installing solar and have tenants pay me instead of the utility company?
• Will installing solar truly offset such a significant electricity cost?
• Will the ability to offset electricity costs for an all-electric home create a wider tenant pool for future rental?
• Is it more financially viable to simply install gas?

Any input or experience you're willing to share would be very helpful and appreciated!

Thanks for reading,

Alex

That’s helpful, thanks, @Anthony Palmiotto!

Hey, @Anthony Palmiotto, any tips on what I should be looking for in terms of cap rate?

Great advice, all around! Definitely taking in any and all resources from BP!

Thank you, @Judy Parker, great advice! I'll definitely begin looking into these things.