All Forum Posts by: Ken D.

@Rich Weese Where I get hung up on is if I cash out refinance I still have cash. I just need to make sure my rental income covers my expenses. In this case I would have cash out to reinvest AND a tenant helping me gain equity back from the original property.

Maybe the right way to calculate this trade off is to determine how long it would take the rental income to pay down the equivalent principal to the amount I'd save in taxes from the tax exclusion...

@Brandon Hicks I wish it were so black and white for me!

@Steve Vaughan The 20x rule would say to sell your property when it's worth $420K. Looks like you're selling before that. How did you decide on 0.5% as your criteria to offload?

@John Harris I am also from the SF Bay area looking to get into OOS RE investing. How did you settle on Cleveland, OH and Memphis, TN?

@Dominic Metzger I think you're getting Oakland, CA and the neighborhood of Oakland in Pittsburgh mixed up. @Account Closed and I were referring to Oakland, CA.

That being said, I appreciate the feedback from a Pittsburgh native. Good to know that tear down will be more difficult for the brick buildings in certain areas. 

There is a lot of discussion about how to approach appreciation in RE investing, but say you got lucky. Then what?

My specific situation is that I have a property that I purchased for $300K, is now worth $600K, and still has $280K financed at 3.675%. Monthly rent is at about $2600. What would you do? Sell or cash out refinance if you are trying to expand your portfolio for financial independence? To throw a wrench into the equation, the property qualifies for primary residence tax exclusion until mid year.

Apart from my personal situation, I'm also interested to hear people's opinions on selling vs refinancing to grow their wealth in general. So, what do you do?

There are several rule of thumbs out there. Everyone wants to know when a good time to sell is. I can't remember where I heard this one, but is the 20x rule a "real thing"?

If your property value appreciates to over 20x your gross annual rental income it's probably a good time to sell.

I want to thank all on this thread for your comments. As a new poster (not so new podcast listener) it is refreshing to be able to have a sounding board to keep myself in check.

@Andrew Johnson Your comments are worth quite a bit more to me now knowing you also invest exclusively out of state. I'm aligned with your thought process. There are many neighborhoods that I looked at where there were too many run down properties to be worth looking at. It's the 1 or 2 that I found in much better locations that peaked my interest. About missing something huge...hence the title of the thread :)

@Account Closed I would love to do that, but I haven't come across anything to where the numbers compare. For example, using some Zillow numbers, I could find a 4plex for around $600K in Oakland and rent each 1 bd unit out for $1600 with makes it about a 5cap. In Pittsburgh it isn't too tough to find closer to 10cap properties from what I've seen so far. They just take a little more work and I don't think the rental demand is near the same level, which needs to be taken into account as well. I also haven't actually renovated one yet so actual costs might also be higher than my estimates...

I also think I'll need more than $100K down on an investment property with Oakland prices unless I use unconventional lending.

If my numbers are way off on Oakland I'd be happy to chat more about investment strategies in the Bay area. I'll PM you.