Author Topic: Shuffling houses a good idea?  (Read 611 times)

genesismachine

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Shuffling houses a good idea?
« on: July 18, 2015, 11:34:38 PM »
I have two current rentals. Stats are as follows:
Condo: ~1400/month mortgage+tax+HOA+etc...
Condo Rent: 1300/month
Condo Value: ~235-250k

House: ~1600/month mortgage+tax+etc...
House Rent: 1235/month
House Value: ~220k

I'm thinking of selling these two to buy a triplex with these stats:
Price: 380k
Down Payment (from proceeds of the other two sales): 80k
Mortgage+tax+etc...: ~1800/month
Current rent (currently rented out): 2750/month

On the surface, it seems obvious, but I'd be paying ~40k in real estate agent fees (FSBO is not an option due to location of house + my and my wife's jobs). How does that factor into these calculations?

Eventually, I'd like to buy another similar triplex, then I could pay off both mortgages plus my primary residence mortgage and FIRE. It kind of takes the 'what if' of the market out of the equation and our FIRE date becomes far more predictable.

Bearded Man

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Re: Shuffling houses a good idea?
« Reply #1 on: July 18, 2015, 11:47:51 PM »
Since you are buying another rental you can avoid depreciation recapture and capital gains by doing a 10-31 exchange, but yes, the realtor fees are rather...inflated for the work.

Can you list it on redfin? Or, do a FSBO and hire a person off angieslist to just show the place. Not even a real estate agent, but a property manager. Not sure that's legal, but worth a look. You would handle paperwork but the PM would just act as your assistant for the purpose of unlocking the door and locking it back up when people leave after tours.

I too am trying to figure out the best ways to avoid realtor fees when selling. Luckily I can do FSBO but the buyer will likely use an agent so I'm still paying 3%. Plus there are listing agents that charge only 1%. That's the thing about houses, when you own them, people know you have money and they come out of the woodwork to get some of it. I mean $400 for a home inspection, 2.5 hours of work? lol