All Forum Posts by: Danny Vu

First and foremost I would get the idea of it being a good or bad time to sell out of your head unless your leaving the city because its gonna be a wash selling one property to buy another (with a kicker to the higher taxes you will pay on the new property). If your trying to have investment property analyze your current property as a rental property. If it doesn't get your target return on capital then sell it because you want to get the tax advantage of the gain for having lived in it (though you can defer the sale for a couple years if you want to use it to test drive being a landlord and still get the tax savings).

Other than that I don't think you give us enough information to suggest anything because we don't know what your trying to accomplish, what your risk tolerances are, and what your acceptable level of discomfort it that your willing to accept to achieve your ends. I think you should research the following: House Hacking, VA Loan Options, Live-in Flips. These strategies work well in expensive markets if your willing to live in the property for a certain amount of time. Keep in mind however the place you may want to invest in may not be a place you want to be stuck in if the market turn on you, given you will care more about school districts in five years than you may today.

Hi Robert,

With the going rate of rentals in the area and the new properties/apartments they have been building, I should sit down and really asses our property as a rental. If I do some quick math though, I believe the profit would net around $500-ish/mo.

And you're right, I haven't given enough of my backstory.

What am I trying to accomplish? Owning and renting multiple properties and corporate freedom.

I'd say my risk tolerance and level of discomfort are high and aggressive. Blame it on my military experience, or blame it on my learning experiences from my losses in the stock market. I've lost and I've learned, and I think my risk tolerance has always been the same. The thing that changes is my risk capacity. Especially now with a kid on way.

I really appreciate your insight and will give those topics a look over as well, thank you!

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Originally posted by @Joe Homs:

@Danny Vu first of all Thank You for your service.

It sounds like you have lots of options and goals. I would not recommend renting it out, because you would be going backwards tax speaking. If you sell the home then you have the 121 exclusion from capital gains and can just bank the money. You are a veteran and can get another NO down VA loan on your next purchase.

Are you in your forever home? If not sell. Buy something like a fixer-upper and make it better. Then in two years do it again... You will be living in your forever home in a few steps.

Commissions are NOT that expensive in this hot market right now. Do all your numbers and make your decision.

Good Investing...

Thank you for your support Joe!

I have also heard that if I sell, I may be "taxed out of CA."

We are definitely not in our forever home and I do want to buy something to rehab and potentially flip. I know the market is crazy right now, and a lot of the fixer-uppers are going for $535k+ which will require at least 3% but still no PMI. I'm thankful to have the opportunity to use the VA, it's just a little harder to find something worth the effort in SoCal. Not impossible, but definitely harder!

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Originally posted by @Doug Spence:

@Danny Vu Congrats on the huge equity increase.

Here are my thoughts:

Just because the value of your home has gone up, doesn't mean its a good time to sell. You would make a big profit by selling in a hot market, but you'd also have to buy (or rent) a new home at the top of the market, unless you get creative and buy a property that needs some work, but would still qualify for a VA or conventional loan. If you were to sell your current home and buy a 2-4 unit property with your VA loan and house hack, that could be a good strategy and good reason to sell. But that may not fit your family needs right now.

Also, remember that the transactional costs of real estate are high. You will pay 6% commission to the buying and listing agents, plus closing costs. That is not insignificant.

My questions:

Do you plan to stay in Orange County for a while? If so, why not just stay in that home and look to invest in real estate in other, less expensive markets. I live in San Diego and own properties in Florida, Wisconsin, and Oklahoma (and I'm still active duty).

If you sold, what would you do with that profit you made? If you end up having to put it right into your next house, then what was the point of selling? Or if you have a lump of cash in your account, what would you do with that money? Can you get a better return on that money somewhere else?

Hi Doug, thank you for your response!

I do plan to stay in OC for a while. We're not in our forever home and our needs/wants have changed. The home we're currently in was a great experience for us as first time home buyers, but we're ready to move on. I wish I bought a house every where I was stationed, but I didn't have that mindset in my early twenties.

The profit made on the home would sit with us until we could find our next purchase. We were given the opportunity to move into her parents' guest house for an extended stay while we searched/waited out the marked, or rehab the next property.

I've considered investing out of state, but have decided to start locally. The idea of finding the right property manager and dealing with a property sight unseen is still unfamiliar territory for me. Unlucky for me, locally is Southern CA lol.

Thank you for your service!

1 Vote

Hi everyone! I've been really diving into real estate lately and wanted to get your opinion/advice on starting the investment portfolio. I'm not new to investing, but am new to real estate investing. I have been trying to read a lot, study the market, listen to podcasts, etc...

Long story short, my wife and I purchased our first home in 2019 in Orange County, CA and are coming up on our two years here this summer. Our home value went up substantially, and we are considering on selling come summer time. We have our first child who's expected to arrive next month, and all I can think about is the future.

I have contemplated on renting out our property, but I believe right now is a prime time to sell our place. We initially purchased our home using the VA loan (I'm a USAF Veteran), and would use it for our next property as well since we refinanced over the summer.

My question to you is, if you were in a position with a decent amount in equity, would you:

A) Rent out the property.

B) Sell and use the equity as a down payment for another property.

I want to pick up a little fixer-upper for our next home, but the buyer's market is a little crazy right now. If we sold our place come summertime, we do have a place to live for the time being until another property is found.

I talked to my wife about using the money to get ourselves a rental property, but really don't know which direction to take.

This place seems like a great place for networking and ideas so any input is greatly appreciated.

Thank you!

2 Votes

All Forum Posts by: Danny Vu

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