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2 flat cash flow analysis-prior to poss sale

September 8th, 2018 at 08:27 am

Hi all

Lookings like I can list the 2 flat around $134900.. sell between $125-130. I owe $11800 on it.

These are the #s (attached)

It will need a new roof at some point and it was a nightmare to fix up. I do not think I want it anymore and would prefer to invest the cash.



Below is my rental budget WITHOUT the 2 flat. With the 2 flat it goes up approx $1000



6 Responses to “2 flat cash flow analysis-prior to poss sale”

  1. AnotherReader Says:

    If it was already fixed up and you bought it today, would you still dislike the property? Is it in worse area than the others? Does it have a floor plan that is difficult to lease? How much is a roof and how soon will it be needed?

    Unless there is something about this property that is not fixable - something like location or layout - I would be inclined to keep it. It's producing good cash flow, although you did not subtract vacancy, on your investment and on current value. You also have the tax benefits.

    As long as you are working, I would take all the net cash flow from these properties and invest it into the market. In two years you will have exceeded the amount you would be able to invest if you sold the one property today and you will still have the same income from the properties. In addition, I would fully fund the retirement accounts available to you.

    You will be in a better position to retire completely at the two year point. In your shoes, I would consider selling the house and downsizing into an "in town" house just before retiring. Get the mortgage if it makes sense, and then retire.

  2. AnotherReader Says:

    Forgot to add: Do the rental budget with the two flat after payoff for comparison. I think this will put you very close to achieving your $8,000 passive income goal. If you take this path, you are reasonably insulated from the vicissitudes of the stock market as well as employment. Something I would strongly consider in your shoes.

  3. rob62521 Says:

    Although Another Reader makes some great points, I get that sometimes owning something like this is is overwhelming. Hope you can get out from under it and move on.

  4. Rachael777 Says:

    I think it comes down to personal choice and I am still thinking. The key thing here is that I have a 4 year city certificate which means no inspections for 4 years. That is a big asset and helps cut risk and uncertainty but really the place is in good shape. (with the amount of fix up I did! haha). The roof is ok now but will need a new roof in a few years (3-5?) not sure.. It will need normal maintenance and I have never maintained it through a winter with renters. As this is a 2 flat I do not expect the price to go up appreciably year over year. so I think my current plan is to look at the #s maybe over a few months, talk to the manager for thoughts, my accountant for thoughts and maybe hang on to it for a few years. I DO want to do what Another Reader said and put 100% of the excessive profit from the homes into savings/investments while I am working. My new house (praying it works out) will have a lower mortgage but some fix up costs up front which I plan to partialy defer w the money I get from my home sale. We will see. Still thinking and no rush to sell it next week. I REALLY need to start contributing to investments etc.. have not done so as much lately this year as all the costs w this 2 flat and tax escrow payoff. Taxes are now paid I will take some time this week to thoroughly analyze things and set a new plan. thanks everyone I think a new plan will be motivating and get be back on track with some goals

  5. Rachael777 Says:

    I pulled all the deeds for the homes I owned yesterday to submit for a loan verification and I felt PROUD and EXCITED! Smile

  6. AnotherReader Says:

    Yeah, it's a lot of fun filling out a mortgage application with a lot of paid for properties. The underwriters often go back to the lender and ask for the details of the "missing" mortgages.

    I'm pretty sure if you kept it, you would have a lot of cash to invest. In your shoes, I would come up with a new goal and plan, called "Done at 50."

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