All Forum Posts by: Lewis Chaloner

Gentlemen, thank you for your advice and feedback. @dan heuschele what you described is exactly what I planned to do.  But now I'm confronted with an opportunity to make a very good profit right now and remove any headaches from the property so I am second guessing that very hard.  Your investments do leave me very envious and impressed.

@ joe villenueve, I appreciate the thoughts. My only issue with what you have said is that I got the place for 0 down. I have spent less than 15k.  Let's say I have to spend 5k a year for a few years to keep it. Each of those years I would get 9k plus in debt pay down for 5 invested. That is a positive return if you look long term enough and I could do that for 7 years before I had even put 10% down on the property. A good way to look at it? No probably not but the ease with which I can hold it is a consideration for me. I would also argue that if I took the money and say, put it in stocks assuming they would appreciate that there is no difference there with assuming the house will appreciate, long term. I understand that's not what you are suggesting,  just thinking out loud.

@Dave Foster. I'm really glad you commented. I did the math wrong and was thinking I had until Feb ish of 2022 not 2023.  That means I could stay in the property for 1 more year a roll the dice on more appreciation if I wanted to.  To your point though, no the property is not special. I was interested in your inflation comment. Would you not consider a 30 year mortgage at a decent if not great rate a good inflation hedge? But, I do get the point you made and am leaning that way.

@Eric Schultz,  thanks for the idea.  If I keep it I will open a heloc for a "just in case". I'm just not interested in a massive out of state portfolio. I thought I was. Until my wife asked me why. I had no answer. I'm 9 years away from a very good pension. If I do the right things with my two current properties and invest wisely with the rest of my money I'll be just fine.  I get the point you are making but I guess when it comes down to it there are two things. 1. I'm more risk adverse. 2. I genuinely just don't want to put in the work it would take to do what you are suggesting we'll. I have an involved job that sees me gone a lot I don't feel the added work would be good.  Thanks for your advise though. 

@Mathew Paul.  You made me laugh. But you also summed the entire thing up with one sentence. If I sell i take a guaranteed win.  If I'm greedy I could lose a lot short term. I'm not going to worry about earthquakes though. Appreciate the thoughts.

Really appreciate everyone's feedback. That is a lot of extra thoughts to consider and will absolutely help me. 

Cheers.

I currently own a home in San Diego that I bought in 2015 with 0% down for about $500k. I moved at the start of 2020 and have rented it since. PITI is $2750. Rent is $3000 and the tenants will leave in June (inside my 2 year tax free window, and I don't ever plan to return to this property as I have another home with ADU in San Diego). I expect the home will sell for somewhere in the low to mid 700s, lets call it 725k. I owe 455k. Cost to sell will be 7ish% so I will have a large win If I sell now.

But.  I put 0% down, I have less than 15k in the house in 6 years.  It has some mx coming due in the next few years, probably a roof and some work on the garage.  I make enough to pay for this and my currently debt pay down is about 9k a year at 3.5%.

I'm sure most people would say sell this property as it isn't a cash flowing property. Take the win and invest in a better performing asset. However, I think there is a case to be made for keeping the property, continuing to pay down the debt and 1031 into a dream property in 10 years time when I expect to leave San Diego. I will have to pay CAPEX but the taxes on the property are (ALMOST) fixed and it is certainly hold-able, I am also able to depreciate it etc etc etc. I can also delay selling and purchasing fees and still believe in a long term hold strategy.

Does anyone have any feedback or thought or does everyone suggest selling?  Does this change with the possibility of higher inflation?

Long story short.

Sell for a large win in June/July or hold for another 8-10 years as a marginal property and rely on debt pay down and possibly inflation to help a decade later.