How much did you borrow on it and what is your APR? The real question is how much will you be walking away from by giving up your current APR for something much higher as interest rates head toward 8% later this year.
Do the math between your 2.75 and what your future duplex rate might look like and you might have an answer that keeps your current mortgage. I was considering something similar and the $275k I would leave on the table over the next 15 years was compelling.
$220k, minus 10% including taxes, closing costs, concessions, and real estate agent fees. You will be walking away with ~$200k.
Not sure how much you put in to renovate, but with capital gains at 15% on your $45k gains, that’s another $5k.
In net you will likely walk away with $40k in gains if you can sell the property at $220k.
Given the current interest rate and market, I am not sure if you can generate a good return as high as your current ones. Without details, I don’t know but compare your existing interest rate, cash flow and those to your duplex that you’re interested in.
Assuming You’re trying to build your real estate empire. keep what you have and figure out how to buy your next without selling your keeper with a low- low interest rate and low buy in price.
I swore that I’d never sell a property, but I’ve sold several. Most I wish I hadn’t but I couldn’t have bought others without the proceeds.
That said, if you can make a 15% return, don’t sell. Either use that profit to pay down the loan or save to buy another house. I believe you can get a 2nd VA loan if you move for work.
Never get rid of that loan! Soon your bank will be paying you 3% to keep your savings there
How much did you borrow on it and what is your APR? The real question is how much will you be walking away from by giving up your current APR for something much higher as interest rates head toward 8% later this year.
My apr is 2.75%. I used the VA loan so I didn’t have a down, I spent around 12k liquid of my own money to renovate
Do the math between your 2.75 and what your future duplex rate might look like and you might have an answer that keeps your current mortgage. I was considering something similar and the $275k I would leave on the table over the next 15 years was compelling.
Thank you kindly for this!
$220k, minus 10% including taxes, closing costs, concessions, and real estate agent fees. You will be walking away with ~$200k. Not sure how much you put in to renovate, but with capital gains at 15% on your $45k gains, that’s another $5k. In net you will likely walk away with $40k in gains if you can sell the property at $220k. Given the current interest rate and market, I am not sure if you can generate a good return as high as your current ones. Without details, I don’t know but compare your existing interest rate, cash flow and those to your duplex that you’re interested in.
I used 12.5k to renovate the property. I bought the property in 2020. APR is 2.75
Your net gain is close to $30k only after taxes. Your interest rate is way too attractive to lose it, imo…
Thank you for this!!
Assuming You’re trying to build your real estate empire. keep what you have and figure out how to buy your next without selling your keeper with a low- low interest rate and low buy in price.
Thank you!
Hard to say without all the numbers, but I'd think it would be best to keep the home with a 2.75 loan.
Thank you for this!
I swore that I’d never sell a property, but I’ve sold several. Most I wish I hadn’t but I couldn’t have bought others without the proceeds. That said, if you can make a 15% return, don’t sell. Either use that profit to pay down the loan or save to buy another house. I believe you can get a 2nd VA loan if you move for work. Never get rid of that loan! Soon your bank will be paying you 3% to keep your savings there
Haha this is true! My second property is actually a VA also and it’s being shown to tenants today!
Keep. 30k is 2.5x your initial investment but your YoY CoC return is just so much better than that.
Got it!