All Forum Posts by: David Walker

Phillip, the calculation is including tax exemption and commissions to real estate agents. I do need to review the bigger pockets book again- so I am sure the following calculation is incorrect.  Cash on cash return (hypothetical) for new property with down payment of 40k and annual rent cash flow (600*12=7200 after taxes maintence ect)...  would be 18%.   6400*9 years(same as the difference in mortgage years saved) equals 64,800 in profit.    However, the morgagte pay down scenario using the 40k one time payment nets me 77k in interest savings.   

I am sure I am doing something wrong, please educate me, lol. 🤓

I am always available for coffee/lunch to discuss more in Spokane! 

I recently moved to Spokane Wa after leaving my house hacking duplex in Tri-cities. I am considering selling the duplex next month, after taxes and commissions- I will be at $40k profit. I am weighing the pros and cons between reinvesting in the Spokane market (i.e. 20% down on a 100k house and renting). Or... making $40k one-time principle payment on our primary home morgagte(252,000 owed).  Amortization schedules are saying that I would shave roughly 9 years off my loan, with an interest savings of $77k.  

What are your guys thoughts?  I appreciate you taking the time to give me feedback!!  :) 

@Dave Foster Great advice, I hadn't thought about that scenario, exemption 121 and 1031 exchange for the rental side. What do you mean by "you will need to recapture the depreciation after three years of rental service"?

@Alice K. I have been considering property management. Great advice!  So the 1031 would be tricky? How would I do that? For example, if I sold today and made 50k equity, would 25k be under exemption 121 and 25k be under 1031?  Can I take the 25k 1031 and combine it with other money to purchase another rental? 

Also, if I refinance, mortgage payment would be $830.  1450-830=620.  I think that would be helpful passive income.

@Brendan R.   If I were single, I would love to take the 50 I have and the 50 in equity and put 5 20k down payments on 5 100k houses and be making great money very soon...  but given that having kids is in the near future, and my wife's family lives in the Spokane area, AND we are ready to move into a larger space... I don't think this will work. 

Thank you guys for all the advice. This is wonderful! 

Alright folks, new to BP and this is my first post. As Brandon Turner has encouraged in the first book of his that I am reading "The Book on Rental Property Investing" here I am posting to the discussions forum. My wife and I purchased a duplex as our first home after college in 2012. We live in one side and rent out the other to an tenantwho has lived there since 1990(wow). We live in Tri Cities WA and trying to move to Spokane WA. We are trying to figure out if we sell or rent the other side. We purchased in sept 2012 for 152k with FHA 3.5% down, we currently owe 134k on the mortgage. Property taxes are $1,634 a year, pmi $139(ouch!)/month, and insurance $45/month. Our mortgage payment is $970/month. Water roughly $100, irrigation $195/year. Our tenant pays her own electricity and garbage. Tenant rent is $675, I think we could rent our side for $775 for $1,450 total. I think I covered all the numbers but please let me know if you need more info.

I had a real estate agent tell me recently they would price today for $187k-194k. My dilemma is that we want to move. So do we sell or do you rent? We currently have $50k sitting in the bank, waiting to be used on a down payment for our new personal residence, we are looking in the $250k range. We currently are saving $3,125 a month into our savings, and have been all year. Of course, the equity in the duplex is an additional $56k if we sold. Of course there will be agent fees as well.

So do we refinance on a 30 year term the duplex, which would get rid of pmi and drop payment to roughly $830 to increase cash flow? Or do we sell and take equity and out to put into another real estate deal or add to down payment fund for new house? Or do we just keep saving at the rate of $3,125/month until....

Thank you very much for taking the time to read this post, I appreciate all the feedback I will receive.

Cheers!