Skip to main content

Should I sell one property to pay off another?

I got into REI a few years ago, and bought a class C duplex cash for about $40k, generating $1000/mo in gross rents (good ROI, but the area is kind of sketchy). My realtor thinks now it's worth around $70k, and that's because our market is currently experiencing a pretty substantial inventory shortage.

The tenants in both units are great people and we get along well. They generally pay on time, and take reasonable care of the property. But, being a class C, there are definitely some issues with property maintenance and on time payments, but none that are extreme at all.

We moved about a year ago and kept our (previous) primary residence and turned it into a rental as well. We owe about $85k on that property. It currently generates gross rents of $1500, with a mortgage of about $850.

The thought is, should we sell the class C duplex to pay off the other property? It will net a little less cash at the end of every month, but we would own it outright (we would either add some savings, or simply own it outright in a year or two).

The upsides to this as I see it are:

  • Fewer tenants to manage
  • Easier to access the equity for future purchases (hard to get money out of a duplex that cheap, with LTV of 75% doesn't leave much)
  • Previous home has much higher potential to appreciate VS duplex

The downsides I see are:

  • Less diversification/more risk due to vacancy
  • Would still have to add some out of pocket to pay off
  • Would not make up the full value difference.

What are your thoughts on the matter?

submitted by /u/Synth3t1c
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/hhap2b/should_i_sell_one_property_to_pay_off_another/
Labels:

Comments

Post a Comment

Popular posts from this blog

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear...
1 comment
Read more

Pool fill without engineer oversight

We are in the process of purchasing our first ever home in CA and we just discovered in the disclosures that the new build property we are purchasing previously had a swimming pool which was filled without an engineer onsite to approve the work (details from disclosure below). Is this something we should be concerned with or not? Is it something we should have additional inspections conducted on? We are originally from the UK and not really sure what to do with this information and if it is concerning or not. A POOL DID EXIST PREVIOUSLY. COPING, TILE, GUNNITE AND REBAR WERE ALL REMOVED AND DIRT AND CLEAN DRAIN ROCK WERE USED TO FILL IT IN. COMPACTED FILL WAS NOT USED AND NO ENGINEER APPROVED THE DIRT AND DRAIN ROCK FILL IN submitted by /u/tommot82 [link] [comments] source https://www.reddit.com/r/RealEstate/comments/dpyzw8/pool_fill_without_engineer_oversight/
Post a Comment
Read more

Making offers on houses not listed for sale.

I want to buy a home for retirement. I am looking at lots of options, mostly focusing on the locations that appeal to me. I see lots of Zillow estimates of homes that look like great deals to me. Are these estimates accurate, even though similar houses in the same area that are for sale are usually priced much higher? If so, is it realistic for me to try to make offers to owners that do not have their homes listed? Would a realtor even consider helping me do this? Or, do these values indicate that the houses listed for sale are overpriced, and I should just lowball until someone accepts? Are houses today tending to sell far below list prices, or ??? submitted by /u/chewybrian [link] [comments] source https://www.reddit.com/r/RealEstate/comments/1o4mcon/making_offers_on_houses_not_listed_for_sale/
Post a Comment
Read more