All Forum Posts by: Shahrzad Amin

Hi All,

I am looking to buy a SFH in the 400-450k range in the DFW area, looking to put 20% down, I plan to live in this home for 1-2 yrs before turning it into a rental. I have been looking at Mckinney/Melissa area, what are some recommended areas with decent rental market that is not too far outside the city? I have been looking at 3 bd/2ba and preferably over 1800/1900 sq ft.

I own a condo that I will be renting out which will be cash flowing ~500-600/month

@Bruce Lynn

Thank you so much Bruce for your detailed reply. I agree, HOAs are a major pain. While I do like not worrying about pool and lawn and roof maintenance for my residence, I can see it becoming a major hurdle if I were to turn this unit into a rental.

And don't even get me started on the Midtown project.... quite frankly I think if development does not start by Jan/Feb 2024 I will lose all hope for that ever actually happening.

I will have to do some number crunching to see what I can get if I were to sell this and roll the profits into a SFH in terms of cash flow (with and without financing) and go from there. If I were to turn the condo into a rental and sell down the line in a few years, would I not be able to utilize the 1031 exchange to defer the cap gain taxes?

Appreciate your help.

@William Powell

Thanks for your input William! You are correct, I really do not need the money, I just want to start generating some cash flow (to be reinvested in the stock market/RE). Despite the high interest rates right now, this strategy seems to be what most are recommending (taking a loan out on a nicer primary and renting the condo out).

@William Powell

Thanks for your input William! You are correct, I really do not need the money, I just want to start generating some cash flow (to be reinvested in the stock market/RE). Despite the high interest rates right now, this strategy seems to be what most are recommending (taking a loan out on a nicer primary and renting the condo out).

@Jennifer Volek

Thank you for your input Jennifer! I do plan on building a rental portfolio. I need to check the HOA rules around rentals to see what is allowed, thanks for the idea around MTRs and STRs. I will definitely keep you in mind for when I start looking into selling/renting.

@Tyler Hodgson

Thank you so much for your input Tyler. You make a very good point. I think I need to start looking at potential properties I can buy with the proceeds of the sale of my condo + financing and do some projections as far as returns on both options.

@Andrew Newcomb

Thanks for your input Andrew. You are correct, I would be exempt from capital gains tax since profit would not exceed 250k and the unit is my primary residence. The main reason I am considering keeping the unit even with the high HOA is the growth potential due to this major development: https://dallasinnovates.com/va...

@Randall Alan 

Thank you for your feedback. I am allowed to rent my condo unit out but you do make a good point, I need to look more carefully into all the "rules" imposed by the HOA with regards to renting out a unit.

I do not think I would be subject to capital gains tax as the profits won't exceed 250k and I was using this unit as my primary residence, however to your point the high rates and expensive prices do make me hesitate in wanting to purchase now vs waiting another year or so. Appreciate your input.

Hi All,

I have some cash (around 80k) on hand (on top of my emergency funds) that I am considering using to buy a rental property to generate some cash flow. I own the condo which I am living in currently with a ~100k mortgage with a 4% rate. I am trying to figure out the smartest investment move. A few things to consider:

a) I have built around 180-200k equity in my condo

b) the HOA fees are somewhat high in this community, ~400/month.

c) This condo is in an area with growth potential as a new project (The Dallas Midtown project) is going to start soon (it has been getting delayed for quite a few years so not completely confident in it actually starting).

d) I would like to move out of this condo in the next 6 months (potentially out of state)

So I am considering these options and would love some feedback:

1) Sell the condo, take the equity 150-200k, add my 80-100K on top and buy a SFH cash and rent it out, and personally live in a smaller apartment (rent would be similar to what I am paying on my mortgage now) so technically whatever I make from the rental property would be my cash flow .

2) Keep the condo and rent it out, cash flow will not be huge, maybe $400-$500 after expenses (due to high HOA fees), and take out another mortgage with the current high interest rates, use the 80k as down payment for a second rental property (unsure what the numbers would be given the mortgage payment, probably not a whole lot) and rent an apt to live in.

3) Any other ideas/hacks I am not thinking about? Take a loan from 401k? buy a bigger property as my primary residence, live for 6 months and then rent it out?