All Forum Posts by: Stinson McElhinney

Great question, sorry I didn’t mention it.  I’ve owned it for 3 years.  Lived in it for 1.5 years, then moved overseas and rented it for 1.5 years. 

Hello, looking for guidance on my particular situation.

I have a well done, fully remodelled home in Carlsbad, CA in a very desireable neighborhood.  It was my primary residence before I took an overseas assignment and we love the house and neighborhood.  I owe $1,100,000.  Mortgage (rate is 2.85%), interest, insurance, property management, and hoa is $6500/month. Current rent is $6800, as it was locked in 2 years ago. I think it can raise to $7500-$7800.  I've been "soft offered" $2.7m, which is over current valuations.  We have been considering not returning to CA due to high costs and taxes.  I have another residence in ID that we are planning to move into upon returning from overseas. 

I would like to retire in 10 years and am considering selling the house which could produce about $1.4M after realtor fees, then use that to buy ~3ish rental properties cash in an 1031 exchange so I minimize the tax exposure and start producing monthly cashflow that can provide the basis for a retirement in 10 years.  Thinking to buy cash to simplify closing everything on time, then refi them later to pull some cash out and add some additional rentals. 

Am I thinking through this correctly or missing something significant?  CA has always been a strong realestate market, so should I opt for less cash flow, have the option to live in my house, and potentially better appreciation, or should I move on with generating additional cash flow in a different market?

Appreciate any guidance.  Thank you to the community. 

Thanks for the feedback.  

I think I will go with a finance to own option. As my tenants electric bill is about twice what the payment would be, I think it will allow me to increase the rent enough to make it reasonable for the tenant and effectively fund it. 

San Diego will go from NEM 2.0 to NEM 3.0 in April.  The new program is much less favorable and current tax credits for Solar have gone from 26% to 30%.  Utility rates continue to climb substantially. Does it make sense to invest in solar for the rental considering the tenants pay utilities?  Can it help offset rent increases?  Does it ultimately improve resale value?  Thanks.