Question : Should I sell my rental and use the money to buy additional rentals and/or invest that money other ways or should I hang onto it and refinance and get a cash out to use to purchase another rental property?
Situation : I have two rentals and my main residence. No debt otherwise. Emergency fund is in place.
The rental I want to sell or refi is located in California, was built in 1989, two story, 3bed/2.5bath 1400 sqft and I rent for $1500 a month. I owe about $172k (30yr FHA @5% in 2009) I bought for $205k and might be able to sell for around $340k. It probably needs a new roof within the next few years and needs the exterior to be painted soon. I’m also thinking about bumping the rent up to around $1600.
I was originally thinking about selling it and using the money I make off of it to save, invest, and use as a down payment on additional rental(s). I don’t think i’ll do a 1031 exchange because I don’t have that kind of motivation to deal with the 45 day window to purchase other rentals. I was thinking about looking into spending around $60k (3x20k) on downpayment for three additional rentals and then playing with the rest of the money in other types of investments.
OR
I keep going back and forth with the idea of just refinancing it to a lower rate and cashing out around $20k-$30k and using that to fix it up a little and as a downpayment on another rental in the $100-$150k range. If I bump the rent up $100 more a month and bring the payment down a little bit while getting rid of $78 a month of PMI I could make a $300-$400ish a month net. There are some townhouse/condos I can buy that brings in around $950 in rent (gross).
Other thing to consider with this scenario is my other rental. I bought it new in 2008 and don’t plan on selling anytime soon… however I can always refinance it also and get a cash out to play with in addition to my older rental. I owe around $160k @ 4.5% on that loan. It’s worth around $320k.
Thoughts? Ideas? Thanks!
Submitted May 14, 2017 at 11:44PM by BadMouth123 http://ift.tt/2r7kOuV
