All Forum Posts by: Nic A.

Add this to the information your processing - What your talking about doing is eliminating around $4000 or interest expense (which is deductible anyway so really could be a real impact of eliminating $2800 or so) of debt in exchange for paying over $10K in capital gains tax (don't forget possible state gains tax as well).

the rest of the loan payment right now is coming back to you eventually. So it looks like you would need around 4-5 years to get to break even by selling those stocks and paying the tax now. Could stocks drop a lot very shortly - sure. But do you think that 4-5 years is not a window enough of time for them to recover? That's the question.

I'm not a fan of 8.125 either. But you mentioned not needing cash right now. and 5 years is a long window for things to change in ways we don't expect (lower interest rates maybe??).

All great points, thanks Dave!

1 Vote

Curious thoughts on the following scenario.

Current SFR with $51k loan at 8.125%, just purchased with around 10% built-in equity on the property, $250 monthly cashflow (post expenses). Current individual stock portfolio (non-retirement accounts) with holdings that might be volatile in the next few years (big tech & big oil). $51k is about 17% of the portfolio and gains on the stock holdings are already 100-200% (long-term).

I wonder if it's worth it to sell shares pay the 15% capital gains and pay off the mortgage. The cash flow of the paid-off property would be $480 monthly (post expenses) and am thinking of reinvesting that back in the market. A few other things I'm considering;

- I don't need the extra cash flow to live and am just approaching it to remove the high mortgage interest, but also hedge risk that the current stocks might tank in a few years.
- Could take all current cash flow and a few thousand a year to pay off the property in 5-10 years.
- Hold for a bit and 1031 into something else but am fairly confident there is not much appreciation to come on this property.

0 Votes

Curious the groups thoughts 4 years later and the following scenario.

A $51k loan at 8.125% with stock holdings that might be volatile next fewer years (big tech & big oil). Gains on the stock holdings are 50-100%. With cash flow of the paid off property at $480 monthly (post expenses)

0 Votes

Quote from @Jai Johnson:

The total mortgage interest paid on a $150,000 loan at 4.3% over 30 years would be approximately $117,231.

The total capital gains tax of $172,500 at 15% would be roughly $25,875.

Selling the investments, paying the capital gains tax, and paying off the mortgage would save you $91,356 over 30 years.

But...

The total appreciation of $172,500, assuming an average stock market return of 7% annually over 30 years, would be approximately $1,313,114.

The total appreciation of $172,500, assuming an average annual return of 4.3% over 30 years, would be approximately $609,984.

curious why the last calculation is using a rate of 4.3%?

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Quote from @Shelby Ek:

I figured I should post how this turned out for anyone else who is in my situation. I was able to convince my lender to allow me to do an air pressure test of plumbing lines, it passed and so I provided that info to the lender and they accepted it in lieu of turning on water. The lender also insisted on 20% down instead of the 5% I was hoping for. Luckily this was a super cheap property so I could afford the additional down payment.

@Shelby Ek curious who you were able to get to do the air pressure test? Also seems from others an air pressure test should have been done by the FSM was that not the case for you?

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@Ben Stout Curious how everything went? Did you get an accepted bid? Was the plumbing a bigger issue than you expected/budgeted? What ended up being the problem and solution?

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@Zach Yonek Curious how everything went? Did you get an accepted bid? Was the plumbing a bigger issue then you expected/budgeted? What ended up being the problem and solution?

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Quote from @Thurben James:

Just curious how people feel about investing in Youngstown Ohio.

Depends if you're out of state or not. Also the area of town you're buying. A lot of the deals out on the MLS I'd be cautious of because despite them cash flowing there maybe be problems waiting for you. It's not to say there isn't opportunities in Youngstown but if you're starting out I'd recommend starting somewhere close. If you're priced out of your own backyard then yes keep looking out of state.

0 Votes

Quote from @Nic A.:

Current owner selling SFR in 78239

3 bed 2 bath 1,900 sqft

Built 1971

Current tenants on lease until July 2024

Brand new HVAC installed past summer

looking to sell for $180k

Feel free to reach out with questions.

Photos are 10 years old from when current tenants moved in.

0 Votes

San Antonio, Texas

Current owner selling SFR in 78239

3 bed 2 bath 1,900 sqft

Built 1971

Current tenants on lease until July 2024

Brand new HVAC installed past summer

looking to sell for $180k

Feel free to reach out with questions.

0 Votes

San Antonio, Texas

All Forum Posts by: Nic A.

Nic A. has started 4 posts and replied 17 times.

Post: Sell Stock To Buy Investment Property or Keep As Conventional

Post: Sell Stock To Buy Investment Property or Keep As Conventional

Post: Should you sell stocks to pay off a rental early?

Post: Should you sell stocks to pay off a rental early?

Post: HUD homes activating utilities for inspection or apprasials

Post: HUD Home/Plumbing doesn't hold pressure

Post: Pressure test failed

Post: Thoughts on Youngstown Ohio

Post: Off market property 3bed2bath 78239

Post: Off market property 3bed2bath 78239