Scenario:

You have an investment property. 3.75% interest rate. About $100k left on the note. $125-150k in equity. The market is hot, and there is 0, I'll repeat, ZERO inventory where this sits. Demand is really high.

Rents are $1400 but you might be able to bump it to $1500 or $1550/month. Annual gross profit at the current rents is ~$4,500/yr, and there may be another decent increase in value over the next 12 months before construction in the area starts to have any impact on supply.

You can't forecast the top, but you feel like it's pretty close. Do you take the $ and find an area to reinvest the gains or do you keep raking in the rents and see where the market goes over the next 12 months?

This is the direction I'm leaning. If you only factor purchase price and estimated sale price it's ~60% ROI in the 2 years since we closed.

Sell, your long rates are valuable but think offset by costs. Recycle the money

RGRAg1/75 said:

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Scenario:

You have an investment property. 3.75% interest rate. About $100k left on the note. $125-150k in equity. The market is hot, and there is 0, I'll repeat, ZERO inventory where this sits. Demand is really high.

Rents are $1400 but you might be able to bump it to $1500 or $1550/month. Annual gross profit at the current rents is ~$4,500/yr, and there may be another decent increase in value over the next 12 months before construction in the area starts to have any impact on supply.

You can't forecast the top, but you feel like it's pretty close. Do you take the $ and find an area to reinvest the gains or do you keep raking in the rents and see where the market goes over the next 12 months?

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Location/sqft/bed/bath count?

My gut tells me it's under-rented at $1400. Not sure if that changes anything but that's my hunch. But, when you are evaluating the deal, it's helpful to make sure numbers are market.

I am all about creating sales revenue in real estate to then invest in real estate development, the Equity Multiples are hard to beat.

What (do you think you) could you sell it for ?

I'd sell.

I'm also confident. I have some guidelines, know the market, and don't get in hurry to buy... I feel like I can do it again.

I don't sell till I find the new property. It is making a profit and over time, even if there is a pullback, prices rise.

In fact if you can hold on until rates come back down I probably don't sell, but pull equity out and use that to buy another property. Slowly keep doing this till you have 10 or so properties that others are paying for.

You cashflow, pay zero taxes due to depreciation of assets while over long term real estate increases.

I wish I did that when I was in my 20's. Ugh. Still retired at 54, but damn I would have 8 figures easy if I did that.

Just don't ever get to thin as downturns happen and you need to be able to ride them out and more importantly take advantage of them. Accumulating wealth is a long game.

Sell. Get 4-5% in a CD or savings account, and look for a much more profitable property (STR in a mountain or beach town).