All Forum Posts by: Jimmy Watson

@Scott Thomas thank you! I’m more along the lines of keeping it as well.

@Mike Dymski thank you! You’re correct on it being owner occupied before it turned into a rental. Thanks for the tax tip !

@Landon Bleau great points, thank you. I see what you’re saying and I’ll need to explore these possibilities.

Quote from @Landon Bleau:

Quote from @Jimmy Watson:

Great idea, but I don't think I'd make as much on an AirBnB as it's a little further inland and wouldn't be an ideal vacation rental- plus the feast/famine of AirBnB would stress me out a bit.  

What exactly do you mean by my return on equity being extremely low?  

I've looked into a HELOC, but the interest rates did not seem very favorable and I don't know where to immediately invest that money.

 Your return on equity is 1.6% ($400*12=$4,800, $4,800/$300,000=1.6%) which is pretty low.  If you were to take that equity and deploy it across multiple properties I'm nearly positive you'd drastically be able to increase your cashflow.

In terms of the HELOC, one of the nice things is you don't have to pay interest on the money unless you're using it. So you not knowing you're going to put the money next is OK, you don't have to pay anything unless you're using the money.

 Ah, I see what you mean.  Thanks!  Do you factor in appreciation on the property (nearly double) as a return on the investment?  I am sure I could cashflow a lot higher in other properties but I think the appreciation would be lacking.  Perhaps that's the wrong mindset though.

Thanks for opening my eyes to that aspect of the HELOC. I had no idea you were only charged on what you used.

Quote from @Account Closed:

Quote from @Jimmy Watson:

Hi all,

I purchased a 3 bed, 2 bath condo in Oceanside, CA with a VA loan for 0 down in 2017 for $336,000. My mortgage rate is 2.75%, I owe 300K on the property, and the unit right next to me just sold for $530K a few months ago. I believe I could easily sell it for about 550-600K in this hot market right now. I'm really deciding if now is the time to sell but I just don't have enough experience to take the next step so I'm turning to you all for help. Here are the numbers:

Expenses:

PITI: $1695 / month

HOA: $325 / month

Property Management: $145 / month

Income:

Rent:  $2,600 / month

Total profit:  $435 / month (~$3,000-$4,000 a year due to occasional repairs).

With rents continuing to rise at unprecedented levels and home prices expected to appreciate another 15-20% this year for San Diego County, it seems silly to sell at this point with a cash flowing rental property.  However, I just can't help but think about pulling out all of that equity seeing as my condo has nearly doubled in value in just 5 years.  Being able to pull almost $300K from putting 0 down is extremely enticing but my greed is setting in about it doubling again in value in another 5 years (unlikely, I know- but let me dream).  

Should I stay or should I go?  I feel like best option would be to 1031 and go out of state, but I have analysis paralysis about where to start and I don't have a firm grasp on any other market.

Thanks in advance!

James

 It depends.

What are you going to do with the money? What's the goal?

Preferably take the money and either dump it into a small multifamily, several SFH rentals in a midwest market, or throw it into the stock market. That's the hang up for me though... no idea where to invest out of state (so many options and no idea how to build a team I can trust).

Great idea, but I don't think I'd make as much on an AirBnB as it's a little further inland and wouldn't be an ideal vacation rental- plus the feast/famine of AirBnB would stress me out a bit.  

What exactly do you mean by my return on equity being extremely low?  

I've looked into a HELOC, but the interest rates did not seem very favorable and I don't know where to immediately invest that money.

Hi all,

I purchased a 3 bed, 2 bath condo in Oceanside, CA with a VA loan for 0 down in 2017 for $336,000. My mortgage rate is 2.75%, I owe 300K on the property, and the unit right next to me just sold for $530K a few months ago. I believe I could easily sell it for about 550-600K in this hot market right now. I'm really deciding if now is the time to sell but I just don't have enough experience to take the next step so I'm turning to you all for help. Here are the numbers:

Expenses:

PITI: $1695 / month

HOA: $325 / month

Property Management: $145 / month

Income:

Rent:  $2,600 / month

Total profit:  $435 / month (~$3,000-$4,000 a year due to occasional repairs).

With rents continuing to rise at unprecedented levels and home prices expected to appreciate another 15-20% this year for San Diego County, it seems silly to sell at this point with a cash flowing rental property.  However, I just can't help but think about pulling out all of that equity seeing as my condo has nearly doubled in value in just 5 years.  Being able to pull almost $300K from putting 0 down is extremely enticing but my greed is setting in about it doubling again in value in another 5 years (unlikely, I know- but let me dream).  

Should I stay or should I go?  I feel like best option would be to 1031 and go out of state, but I have analysis paralysis about where to start and I don't have a firm grasp on any other market.

Thanks in advance!

James

@Bill Brandt

This really struck a chord with me, seeing as I listened to the 'experts' in 2019 and put my TSP into a safe, low interest fund. I missed out on incredible growth this year and am kicking myself for it. Should have listened to Buffet and 'set it and forget it'

Thank you! I ended up going with an 18 gauge, 9" deep stainless steel, and squared off like the one you posted. Love it and can't wait to get it installed!

I personally just bought a beautiful, 3 bed 2 bath condo built in 2005 for 333,000$ in east Oceanside right off the 76. I could rent I out for anywhere from 2150-2350 per month and my break-even is 2250$ at this point (living in it first). Hopefully in a few years when I move, it appreciates and rents go up... then I'm making a profit! Bought it as a VA loan and had investment property in mind in the distant future. Point of saying all of that is there is plenty of upside in Oceanside and some good bang for your buck- with a lot of quality neighborhoods. Biggest benefit? RIGHT next to a massive military base that isn't going anywhere! Military = constant supply of renters that will never dry up, no matter how bad the economy gets.