All Forum Posts by: Rahul Singh

Thank you all so much for your input.  It really helped me validate that we were making the right move.  Home will be on the market this week.

I will also look at options that folks suggested.

@Jake Thomas I will get in touch with you as I have a few questions for you regarding the property you sold.

Thanks again.

Hello Everyone,

I need some advise from you all.

We are purchasing a new home and have some equity in our current home.  We have the flexibility to not touch the current property and rent it out.  However, I'm not sure if we are getting the best return on our investment with our equity in that property.

Here are the numbers:

Type: SFH

Rent: $2600/month

Current Property value:  $530K

Current Loan Amount: $340K

Other Cons:

-Across from railroad tracks.  On busy road.

-Below average schools

Pros:

-Corner lot

-Very well maintained home. In very good condition.

Market is hot in the area right now and we can easily sell this home with multiple offers.  My gut tells me that this is close to the peak of this home's value and it's not going to increase much over next several years as market is going to go side ways.

What do you guys think?  Can I do better with the equity?  Should I just rent is out?  What would you do?  If I do pull the money out, then I'm looking at loosing close to 28K for sells commission too.  Please consider that in your analysis.

Please express your ideas with some numbers to support your input if possible.

Any input is much appreciated.  Thank you much in advance.

@Chris V. Thank you for the input.  We decided to not pursue that property but @Rahul Dutta is looking to invest in the area.  I'm sure your feedback will help him make his decision.

Good luck!! Rahul Dutta.

@Rahul Dutta If we are talking about the same units closer to highway 99 near fox creek, then the units look fine from the outside but pay close attention to the units itself.  Make sure you put in a contingency for home inspection as most seller in the area are usually selling as is.  Another issue that was raised to us was bug infestation there so get that checked out as well.  We were also told that you should be ready to do complete renovation every 5 years or so.

As Sue mentioned, you may be able to get more in rent under new contracts.  Good luck.

Hi @L'aura Bradford No, we decided not to go through as per recommendations from a knowledgeable realtor that we found in the area.  She recommended that maintenance requirements in that area were going to kill our cash flow along with some other concerns.

These duplex only look good in pictures.  Our walk through raised some concerns as well.  We request an inspection contingent deposit but the seller insisted an as-is offer.  We couldn't afford to make any mistakes with our first investment.

Good luck!

Thank you @Joe Bertolino

 I don't want to be close to MLK Blvd in south Stockton.  I have friends who lived there and recommended to stay away from those areas.

My property is in North Stockton very close to Madera.  There are numerous new single family home in the area so I'm hoping for better appreciation on the property as well.

Thank you @Rob Beland for your input.

Unfortunately, this is best ROI you can get close to us here for decent property.

What is your rule of them as far as COC return goes?

Hello Everyone,

I need everyone's input on a deal that I'm in the process of making.  Here are details:

• Specs: Duplex built in 1976, each unit with 3 bedrooms and 2 bathroom
• Purchase price / financing: $199,000 with 20% down
• Rented: Both units are rented at $950/unit/month = $1900/month
• P&I:  $770 
• Insurance: $75
• Property taxes: $199
• Maintenance, repairs, reserves: 15% of total rent = $285
• Utilities: $0
• Property Management: $0 I will do it myself 
• Vacancy: 10% of total rent = $190
• Cash flow:
  • 1900-770-75-199-285-190= $381
• Tenants are section 8 with roughly 60-40 split between housing authority and tenant (40%)

There are couple of minor issues with the property which would need about $2000 of work but not currently required.  Only because I would like to see my property in a little better shape.

Does this sound like a good deal?  What concerns would you have?  Is it difficult to deal with section 8 tenants then normal?  Are there any pitfalls or things that I'm not accounting for in my assumptions above?

Please note anything else you feel may be helpful to us.  Your input is much appreciated.  Thank you much.

@Mindy Jensen

 @Franklin Romine 

@Jane A.

Thank you all for great input.  You all have been a great help to narrow down my choice.

I'm moving towards keeping our current home and renting it out.  I dont want to refinance to pull money out because I have great interest rate and don't want to impact the cash flow on the property.  We have flexibility to not have to touch it to invest our side our area.

Any areas you guys like that makes good cash flow sense outside of bay area.

Thank you once again.

@Mindy Jensen

Sorry for some reason I wasn't able to tag you on my initial reply.

Here it is again so you don't have to scroll through :)

Thank you Mindy for great insight and clarifying 1031 exchange for me.

You're correct. I meant to say Sellers market. I guess wishful thinking was stated above :)

We are qualified for a house in our desired neighborhood so that's not the bottleneck for us.

My concerns with renting our home are:

-Losing out on the equity if there's another collapse especially since it's not in the nicer neighborhood which is more likely retain its value. Not that we would be in a bind but it's always nice to have flexibility and sustain the value as much as possible. Am I overreacting here?

-Aren't there any tax benefits for having a larger mortgage? What about your home's appreciation over time?

Your thoughts?