Originally posted by @Drew Sygit:
STR = Short Term Rental (you wrote, "we would like to get into a short term rental.")
Not understanding, "If we sell, we could use my wife's credit to buy a new property with the proceeds". If your lender is telling you it will take 12 months before your wife can refi, then why wouldn't it take 12 months before she could do a purchase mortgage?
Also, why are you trying to "time the market", (the worry I have is that the longer I sit on the property, the greater the chance the market shifts and I wont be able to pull out the equity)?
What crystal ball are you using? What happens if the market continues to increase?
We've always had the mentality that rental real estate is a long-term hold...
Ah, "Short term rental" yes, I see now. I'm still learning all the lingo:) So, the neighborhood the property is in, is not an "STR" kind of neighborhood.
The property is not eligible for a refi (Due to late/overdue payments) for at least 12 months (according to my broker.) If we sold and had the money for down payment/rehab, my wife would put it in her name.
We're trying to "time the market" because many things I've read/listened to (Including but limited to Bigger Pockets Podcasts) says we are overdue for a down-cycle in the housing market. I'd hate to leave all that potential equity sitting in the rental. No crystal ball, but we're just working with the information we have, planning for the worst and hoping for the best:)
I too would prefer to hold the property but this is the point of the post. I wanted to rehab the property, get higher rent and do a cash out refinance but that isn't possible for at least 12 months. We could hold on to the property and just let it earn a little every month, that is until the tenant moves out and we'd have to do a rehab anyway. Or we could rehab, sell for, a what looks like, a decent profit, then have a down payment/rehab cash and try to get into a short term rental that could have a higher cash flow, and a potential BRRR into more properties.
A: Hold the property that has a 4.68% cap rate (I used to calculator fo find the cap rate) and hope the market keeps improving and nothing goes wrong.
B: Rehab and sell to get some working capital to "buy up" into a better property. Preferably a "STR" with a higher monthly cash flow and the ability to do a cash-out refi.
C: Do the rehab, get higher rent, pay off the rehab cost over the next year to end up with a property with a higher cap-rate/cashflow.
D: Some other option we hadn't thought of?