All Forum Posts by: Shane Benson

What would you do?

I have 2 rentals in Texas. I am currently living and renting a home in North Carolina. I want to buy a home here. Should I sell one rental house to buy a personal house??

The one i want to sell: Roughly 100k equity. Loses $500 per month. Could make it break even if i got a better loan and IF rates came down just a little bit. remodeled and in a good neighborhood. I am aware of capital gains that would have to be paid if I sold it.

My other rental cash flows 500, so covers this one pretty much.

Would need at least 40k to buy a primary, and we only have like 10k. So would probably take all of the equity and put it into a personal home. I am 23 if that matters.

Thank you!

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Lubbock, Texas

Quote from @Tony Aliatim:

Hi Shane,

First, well done as a college student already having a few assets under your belt.

First question I would ask is, do you need the 60k that you would get after the sale? Also, there are tax considerations to take into account, have you held the property long enough to avoid capital gains?

If you plan to sell the property, I would look into doing it sooner rather than later as interest rates will continue to rise and selling the property will become harder as the year continues.

Have you explored selling the house and then using the money to buy two other properties, or even a MF? You could 1031 exchange and avoid paying taxes (you will need to pay the taxes down the road if you pull out the money).

Otherwise, that high rent is an awesome cash flow opportunity which will be a great safety net as you look for a job.

Hope this helps!

Thanks!
I wouldn't say I need the 60k now, but it would be nice. Definitely don't "need" it though.

I would love to roll it into another investment but I would be afraid of not getting qualified for the new loan as i dont have a W2 income to make it easier.

Yes it would be taxed heavily and that would suck if it was not 1031

Thanks for your help

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Hey Susan! I'm a newbie too. I am a realtor. Up to 3 properties now. Got my RE license so I could learn to invest and I would say it was great experience to get some transactions under my belt and learn the process.

However, you already know what you want, and have already gone through some transactions with that duplex it sounds like.

I would say, getting the License is not worth it unless you want to represent people and make money from commissions. There is already too many realtors out there.

Some numbers for you: I pay $170/mo in dues, and $400 a year to my local MLS separately from the $170/mo. ($2400/year)

MLS access is great, but I would recommend just having a great realtor work for you rather than you being the realtor yourself.

Hope this helps!

4 Votes

Hey Guys!

College student here, graduating December '22 (2 months from now) I will be relocating from Lubbock, TX to DFW area in January (with girlfriend getting a job there, I don't have one lined up yet)

I have 3 properties total, 2 stabilized rentals, and one larger house that was supposed to be a flip, and I ended up moving into it instead.

Now I am faced with if i should try to keep the bigger house as a high end rental ($2,500 per month with my market average rent around $1,500) or sell it.

1. Sell: if I sold, would probably list under market value at 280k projected to NET 60k. I am worried with rates skyrocketing if I can even sell it at that price.

2. Rent: Would love to hold a hopefully appreciating asset in a great neighborhood, but may be hard to keep rented out as its not in a rental neighborhood and above the average price point

Background that may be pertinent: This house is on a floating rate, 20 year note owe 200k. I have 2 roommates moving out in December (house hacking now) ARV is 300k, updated interior looks great, but have an unfinished basement, and the exterior needs new fascia.

Any help/opinions are greatly appreciated! Really tough decisions here for me. Thanks!

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Quote from @Lukas Obel:

Quote from @Shane Benson:

Quote from @Lukas Obel:

Quote from @Shane Benson:

22 year old college student house hacker here. Buy a house under market value with an fha or convential loan with as little down as possible. Make minor rehabs (carpet paint) and throw an ad up on facebook for roomates. They will come. Research what other rooms are renting for. I get more because i furnish the rooms. consider travel nurses too. Get the house paid for while you work. Take advantage of the high paying engineering job (w-2 high earning jobs make investing SO much easier)

Buy a new residence every year, maybe a duplex if you can find the right one. youll be golden

Hi Shane
Glad to hear others are in the same boat as me. Sounds like a good strategy. My idea was to do what you had suggested weather it be with friends or people from facebook etc. Did you make any form of rental agreement/contract. Or do you just sort of go with the flow. I lived last year in a house with a 25 year old college student who was doing the same thing and i just venmo'd him every month. Curious to hear what you did/do
Lukas

I have a lease that I get signed with everyone. I used a template that I found on google, about 5 pages. just search "room rental agreement" I did tailor it to my needs with some specifics such as "park in street" Because I like being able to park in my driveway. I live on a quiet street in a mostly retired neighborhood so its fine lol. I am collecting on venmo, however I am transitioning to collecting rent with apts. com, you can set your tenants up on auto-draft, and its more professional

Perfect, makes sense. And do you rent out on a monthly basis or just 6-12 month leases?

im in a college town, so usually 6 months, have had 1 roomate that stayed a year with me though. I just kept her on a month to month after the 6 months.

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Detroit, Michigan