All Forum Posts by: Karen O.

Go to the search bar at the top of this page and type "ubg".  It's BP's own resource.

You can also find it under education / guides.

You should speak to a tax pro.

If the house was your primary residence for 2 of the last 5 years, you can get a $250k capital gain exemption ($500k if married).  This is all irrelevant if you didn't live there or if you can't move back.

If you sell via a 1031 exchange, you can postpone capital gains taxes while repositioning your investment. There are very specific rules related to this, so again you have to work with a pro to get it right.

As for the rental income, vs rental expenses, $2700 in rent less $2400 

in mortgage leaves $300.  However, you haven't indicated any other expenses like taxes, insurance, repairs, capex or property manager.  Unless your mtg payment includes insurance and property taxes, you are not breaking even.  

Were I you, if I didn't quality for the primary residence exemption and couldn't move in in order to qualify, I'd be looking for a way out of this investment and into something else.

You don't say if you are cash flow positive on this property.  

If you're very cash flow positive and a HELOC won't turn your cash cow dry, then tapping the equity to invest elsewhere for positive cash flow wouldn't be a bad thing.

If you are just breaking even or only slightly cash flow positive, a HELOC, when tapped, will put you in the red. You'd need to invest for high cash flow to offset that.

You could sell or 1031 this property into something generating more cash flow.

Finally, though the window might be closing, if you lived in the property for 2 of the last 5 years, you could also sell and get a tax free capital gain to invest elsewhere.  

You have a few options. Choice is yours.

@Adrienne Medina Networking at your local REIA is probably the best place to find those flippers others who can provide guidance and opportunities. I'd also reach out to Dave Van Horn of PPR Note Co. here on BP. He might have some suggestions on how to go about buying existing notes.

Great read. 

Find someone to lend it to at 8-10% for a short term flip.  

Or buy a performing note.  

@Ian Lockwood  Had I discovered RE investing sooner, I probably would have a higher RE allocation too.  I've spent the last few decades maxxing out job sponsored retirement plans.  All of which had some form of matching component that was generous.  

My foray into RE is not even 5 years old.  So for a variety of reason, the learning curve has resulted in a slower transition.  

There is no right answer. 

For some, 100% RE / 0% stocks is right.

For another, 10% RE / 90% stocks is right.

In this forum, I'd expect many will skew higher toward RE, anyone with a W-2 job will likely have some stocks.

Personally, I'm at 10% cash, 30% RE, 60% stocks & bonds.

Some banks will accept the change without charge if you open an account.  I'd call around and find one that does.  

Would it make sense to add a change machine at the property?  

$100/mo CF isn't much and will be less if you refi plus the up front cost of a refi..

Better to sell and use net proceeds to purchase next investment.