All Forum Posts by: Keegan Darby

Hi BP,

I have a property that I’ve been holding for 5 years. It’s on a 30-year mortgage with ~$130k remaining at a 5.25% interest rate.

my monthly mortgage + expenses = 1,350/month and I bring in $2,800/month in rental income. Leaving me about a 10% ROE.

I could sell the property and net $170k and then reinvest that and earn 9% interest annually via lending hard money.

Given these numbers and solely financially speaking, should I sell or hold the property? I don’t need the cash, but would it make more sense to cash out on the equity and invest that?

The area is class C and I don’t expect much appreciation.

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Quote from @Adam Michael Andrews:

Quote from @Keegan Darby:

Hi All,

I have a duplex in Arizona in which I’m in year 3/30 on my mortgage, which has a 4.75% fixed interest rate.

My ROE is ~6%. I’m interested in selling the property, but would ideally be able to sell at a higher value if someone can either A) assume my mortgage or B) I structure owner financing or C) another idea I haven’t thought of.

Recommendations on selling a property with a low interest rate to get the highest price?

You could sell on lease option or installment sale. Installment sale in particular might be helpful from a tax perspective depending on your situation.

Thank you. Installment sale is interesting. How might your structure that? 3 year balloon with what % interest rate?

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Quote from @Kyle Spearin:

@Keegan Darby when you sell, what's your goal with the proceeds? I ask that because that would help inform the strategy.

I would lend it out via hard money, which I'm currently doing, at 10%.

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Quote from @Chris Seveney:

@Keegan Darby

Is your rate adjustable?

It is a fixed rate

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Hi All,

I have a duplex in Arizona in which I’m in year 3/30 on my mortgage, which has a 4.75% fixed interest rate.

Recommendations on selling a property with a low interest rate to get the highest price?

1 Vote

We have a rental property that is now vacant in a C-class area.

Monthly mortgage amount is $780/month (PITI).

Market rent is $1,300/month.

Loan amount left is $132,000.

If we list it, we can sell at $205k and assuming 8% closing / realtor / concession fees, the revenue would be $188k.

So, after paying off the mortgage, would net $58k (and wouldn't pay capital gains taxes as I have so many losses from previous years).

Would you sell it or keep holding it?

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Hi @Bill B. - Thank you for your response.

This one is a solar lease. What are the cons of this vs a solar loan?

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Quote from @Jon K.:

I wouldn't buy it. You mention the ARV so I'm assuming you're either BRRRRing or using a loan to purchase. If you're BRRRRing this property your 150k loan payment is going to be around $1,000 on top of the taxes and insurance. You also haven't accounted for capital expenses, vacancies, maintenance, or the solar panel payment in your cash flow calculation. When underwriting I usually use 5% of gross rent for cap-ex, vacancies and maintenance as place-holders/quick rule of thumb absent better data. You also haven't left room for property management (if you intend to use it).

So long story short, if you're BRRRRing or using a mortgage to obtain the property you are going to be cashflow negative or close to it:

$1,150 - $1,000 - $90 - $62.50 - $62.50 - $62.50 = -$127.50

My personal criteria is that I won't buy any single family rental unless it cash flows $250/month after all average expenses and provides a minimum of a 20% cash on cash return.

Hi @Jon K. - buying cash

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Single family home in class C area:

Buying for $141k

$20k solar loan paid @ $90/month

Rehab of $12k to get rent ready

Rent amount of $1,250/month

Would appraise for $200k

_________________________

So, all in at $154k, which is 77% of ARV

Rent - insurance & taxes = $1,150/month

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Thank you. The AC unit is original - installed in 2005 - so that will likely be a big expense in the coming 18 months.

Has anyone that's kept their primary done a home warranty to protect those items (AC, etc.)?

1 Vote

All Forum Posts by: Keegan Darby

Keegan Darby has started 15 posts and replied 37 times.

Post: Keep or sell?

Post: Selling with a low interest rate

Post: Selling with a low interest rate

Post: Selling with a low interest rate

Post: Selling with a low interest rate

Post: Math on a holding vs selling

Post: Would you buy this rental?

Post: Would you buy this rental?

Post: Would you buy this rental?

Post: Keep and rent or sell primary home?