All Forum Posts by: Ivan Chavez

@Ivan Chavez I am in the same situation here in San Antonio with our 1st rental bought in 2018 for 112k and now we can sell for around 180k. I would like to follow your thread and see what others have to say.

I would only sell if you could redeploy and earn higher ROI/COC

I actually found it out ZILLOW 

The owner had paid to put his listing on Zillow. I also found out about the area through my property manager. My property manager has a really good insight on strong rental/ cash flow neighborhoods.

Doesn't sound like much of a coup to me. After you pay your RE fees you walk away with about 30 grand total (since 23k was yours to begin with that you paid down the note). I assume you lived in this property? If not, and it was a rental, you can knock another 5k off that for your taxes so you gain about 25k. Not that impressive, but maybe the purchase wasn't that impressive to begin with - after all, it's only appreciated 25% in 4 years. That's not nothing, but I have several houses that have doubled in value in the last 4 years (100% appreciation).

@Jaron Walling is right. What are you planning to do with it, what do you do with it now, what would you do with the proceeds? 

This is an amazing time to be a seller here in San Antonio (and lots of other areas too). However, it's a tough time to try to redeploy that income into a new traditional rental. What would your strategy be with the capital? A lot of my clients are shifting their dollars to short-term rentals, land for construction, and 5+ multifamily. There still seems to be a decent amount of value to be had in those types of deals today.

There is no doubt it is a red hot market these days and inventory is low for a variety of reasons making it a sellers market.  I think what Jared said is important, but the numbers and facts need to back up your goals and objectives.  I have a client that has a number of homes in our local area.  He also works with several different property managers.  Over the years he has said he wanted to consolidate them all with us but never has.  Yesterday he called and said one if his managers who has 10 of his properties is pressuring him to sell all of his properties because the market is so hot he could really get a great price.  Problem is, he doesn't want to sell.  Houses are performing, he made it through COVID so far with no real issues except with 1 house.  His goals and objectives are the long term cash flow VS the capital gains he can make by selling today.  Maybe he can sell for more in the future, maybe this is the peak of the market?  No one knows, but what I know in talking with him for 5 minutes is he doesn't want to sell because the cash flow is more important today to him.  Doesn't matter what I think or the other manager thinks.  In fact, the other managers thinking is costing him 10 homes!

So, you may make more money if you sell, you make make more money if you hold for year but what do you think is going to happen with the market?  Will it grow, will it shrink?  Will the current local/state and federal policies (and policy makers) likely to make the home stay the same in value, grow, shrink etc?

As for 1031's I am far from an expert but I would say to look into the Biden tax proposal as they are proposing changes.  I have no idea what the truth is around those proposed changes.  But good to look into it so you know the facts. 

I have family and different people all up north Ivan that are in real estate or were looking to buy or sell a home across the country.  The market has been crazy.  In areas, I have never seen people buy properties above the asking price there are stories of people buying homes above the asking price.  Not saying that will happen to you even if you are in one of those areas.  However, the big talk is how crazy hot it has been.  Now it has seemed hotter last year than this year.  But interest rates are going up a little and some of the last year's home buying may have been people wanting to have a solid investment like a house for themselves and their family.  However, I hope this does not mean if we have a slow down in the economy we don't have a bunch of people over their heads with their mortgages.  I am not as worried about that happening due to how low the rates were, but how crazy people were on the bidding and what some were bidding on.  I would think now would most likely be a good time to sell your property.  I sold some of mine as the market was so hot in areas I did not like as much due to I did not like how the town treated investors in that area.  

1. I would check with someone in your area if your area is up north and seems to be as hot.  Ask around to see how house sales are going.

2. If you do sell, do you have a plan on what you will do with that money to minimize taxes, and do you have a better investment you could put it into?  Do you have a property you could do 1031 on?

What's the cash-flow? What's the COC? What are the numbers telling you? This should be a decision based on numbers and facts.