Author Topic: Best use of sale proceeds  (Read 1281 times)

tmccahil

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Best use of sale proceeds
« on: March 09, 2015, 02:25:42 PM »
My wife and I netted about $67K from the sale of our old apartment. About $20K of that will be used for a renovation of another property. I'm debating how to use the balance: pay down some of our RE loans (we have over $1M in mortgages) or sock it away for our next investment. Thanks in advance for any feedback.

monarda

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Re: Best use of sale proceeds
« Reply #1 on: March 09, 2015, 03:53:41 PM »
Need a little more info before advising.

Is your next investment a real estate investment and is it happening soon? For sure? Or only maybe? What kind of purchase price are you talking? If buying again soon, I'd sock away but keep liquid 20% of ballpark purchase price for a downpayment, or in cash if you plan to purchase very soon. If no new purchases planned in the next ~2 years, see below.

Are any of your mortgages higher interest? (more than say, 5%)  You'd want to pay those higher interest loans down, but may as well keep the low interest loans.

« Last Edit: March 09, 2015, 05:14:59 PM by monarda »

arebelspy

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Re: Best use of sale proceeds
« Reply #2 on: March 09, 2015, 04:54:17 PM »
You should work on an IPS and figure out your AA that makes you comfortable so any excess funds can be applied directly towards your plan.

http://www.bogleheads.org/wiki/Investment_policy_statement

http://www.bogleheads.org/wiki/Asset_allocation
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tmccahil

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Re: Best use of sale proceeds
« Reply #3 on: March 10, 2015, 01:17:51 PM »
@ arebelspy: Great tips. Thank you!

@ monarda: Our next investment would be another property, and it will likely happen in the next year. Purchase price would be determined by our down payment, which would be 25%. All of our existing mortgages have rates between 3.9 and 4.75%. Thank you.