When you go to sell, you're subject to tax on the amount of profit between your adjusted basis and sale price, not your purchase vs sale price.Recapture is not repaying the depreciation.

Since purchasing the home, housing market in my area has declined about 20%.

Those types of properties can bring in good returns, but the management can be intensive, and finding reliable tenants for both residential and commercial spaces might take some work.

Purchase price: $101,000 Cash invested: $25,268 Sale price: $202,000 This was my first ever solo project.

You have used home equity lines of credit to purchase investment rentals and want to know the best way to pay down the HELOCs.Between the two properties you bought, after expenses, you have $250 a month positive cashflow to use.What I like to do is pay down some principal every month with my positive cashflow.I use my extra active income from real estate commissions helping other investors to pay down the principal even more which just frees up that credit for me to use again.I know I can refinance the HELOC debt before it changes to principal and interest as it is just interest only payments as yours are.One difference is the cashflow, I have greater positive cashflow and could make the principal and interest payment in the future with the extra cashflow I already enjoy.I always get HELOCs on my income properties as well after purchasing them to pull out as much of my downpayment as possible.

Our long term goal is to purchase and move to a remote ranch and for me to be able to quit my job around 40 years old.

Purchase price will be around $400-450K. 

This could allow you to use the full amount for purchasing real estate without needing to sell your stocks outright and incurring significant tax implications.

A JWB client purchased this home on 8/30/2024.

I don't try to evict based on neighbor complaints as those aren't super reliable and the people likely won't show up to court.