My wife and I purchased an up down duplex a few years ago for $124k. At the time the basement unit had been renovated up to the sheet rocking phase and the upstairs unit was vacant. We did a facelift on the upstairs unit, placed a tenant and then proceeded to finish the downstairs unit and moved into it when we completed it. We spent about 18k total on both units. The duplex is located close to a university, both units have high ceilings (9-10ft), and are in great condition inside. The duplex was built in 1940 and has had some foundational cracking (though there is nothing on the interior to indicate any structural issues), in addition to some overhanging porch and possible roof repairs that need to be done in the near future. Also, the upstairs bathroom will need to be redone at some point (roughly 15-20k for all repairs). Our all in monthly payment is currently around $850 + 90WSG but would decrease to roughly $650 + 90WSG if we did a cash out refi and pulled out about $35k at current interest rates. The upstairs is renting for $700 but could easily rent for $800 as rates have since increased and we could charge $800+ for the basement unit if we moved out since it is completely renovated. Recently the market has increased dramatically in our area and a realtor told us we could sell for $270k+ (we owe about $118k) despite the work that needs to be done on the exterior. Would we be better off selling now and being ready to purchase several properties at once if the market drops since we are concerned about the foundation cracks/upcoming repairs, or cash out refi and hope that we could still sell it for a decent price in several years after we have obtained more properties using the cash flow/equity from this property? We’d like to avoid selling if possible since the cash flow would help us purchase more properties, we just don’t want to be stuck with a house that may have foundational issues if the market were to drop. Also, just a note, due to zoning changes in our city, if the duplex were ever to burn down or be destroyed in a natural disaster etc. (Unlikely) it would have to be rebuilt as a single family home in a neighborhood that is predominantly multi family. Thanks in advance for your advice.
