All Forum Posts by: Jason Hunt

@Allyson Edwards I hadn't thought of Airbnb. Thanks for the suggestion. The house is on rural-ish island north of Seattle so it doesn't command the same rents that you would expect from Seattle. Sorry, I could have been more clear. The location makes it desirable for retirees and people trying to get away from city life while being close enough to still have a "real job." The dynamic makes for a unique RE market where you can have a million dollar vacation home next door to a hippie commune. It's a fun place to live! But RE tends to be slow to sell and difficult to value because comps are never very similar. As I mentioned, our initial inclination was to sell it, but I'm very averse to the capital gains tax we'd have to pay on it.

I should add that we have about $25k in personal debt to family for a car and another $5k on an interest free (18 months) credit card to pay for my wife's schooling. She has another 2 years to get her MS in social work which will probably cost another $35k. Though the debt is interest free, it still weighs on us especially since it's family. We'd like to be able to pay off that debt and my wife's school in the short term. Not sure if that would change your recommendations, but it's another variable in the decision. 

I just found biggerpockets a few weeks ago, but I have already been amazed by the wealth of information here and the spirit of community and helpfulness in the forums. You guys are amazing.

Having said that we are wondering what we should do with our 1 and only rental property. I will try to be brief with the many confusing details and factors that are making a decision difficult for us.

The house is a SFH near Seattle. We currently reside near Washington DC. The house is a 3/2, 1600sf. It was our primary residence before we moved to VA 5 years ago. We rented it out behind us. I am employed but have a desire to replace my income with rental income to fund my (hopefully early) retirement within 10-15 years.

• Bought 2011, $255,000. (30 year mortgage @3.875%)
• Mortgage (PITI): $1320
• Rent: $1600
• PM: $160
• Utilities paid by tenant except,
• Water: $75/month
• Current value: ~$340,000
• Deferred maint: needs a roof, and new carpet. Probably paint.
• Tenants have been there for 3 years without a raise in rent. They will be moving out in March.

I think that's the gist of things.

Now my question is what do we do? I see our options as:

1. Continue to rent it: Find another renter, raise the rent. Fix the roof and replace carpet (but we don't have cash reserves to pay for it). 
2. Refinance to get equity out. Do the required maint. and fund another rental. (But the payment would go up pushing cash flow more negative, right?)
3. Sell it and 1031 exchange it into another rental property(ies) closer to home.
4. Sell it, pay capital gains, and use the rest to fund another BRRRR rental.
5. Do something else that you suggest that we haven't thought of.

Our first inclination was to sell because it is a bit of a worry being so far away, even though it is under a property management company, and we could use the money to get out of a bit of debt and to hopefully use it to fund another rental around here. But property values are very high around here and it's difficult to find rentals that make sense that you don't have to pay cash for. 

Then I got on bigger pockets and learned about BRRRR and thought this could be a great opportunity to refinance to get to the next one.

What say ye, experts of biggerpockets?

Thanks,

Jason