Getting close to the "2 out of 5 years" primary residency test. Should I sell it?

Real Estate Investing Real Estate Financing
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Pros: If I sell this rental (which was my primary residence for 2 of the last 5 years) I am looking to get about $300k in proceeds… and that would be tax free of course. I could use that cash as downpayments to pick up 3 to 5 other properties, allowing me to expand and geographically diversify my RE portfolio.

Cons: It’s a great cash flowing rental property in a high demand area with high quality (family) tenants. It’s also continuing to increase in value (just not as quickly as last few years.) It’s also a newer property (2006 build) so maintenance costs are pretty light.

I have a year before the IRS primary residence exemption runs out. Advice?

-James

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How about refinancing, taking out cash tax-free, and keeping it?

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Works for me.

Took out HELOC at 3.75%, on my former primary residence and used it tp omvest om tax liens at 18 percent for past 8 years.

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HELOC and refi’s @ <4% on NOO?

Thanks for feedback. I looked at cash out refi option and the conventional $ banks seem to want 65-70% LTV, with points and >5% rate on investment properties. So bad terms and not much $ out. Worse with HELOC… can’t even find a source that will do one on non-owner occupied. Money is cheap, but kinda hard to get these days… Thoughts?

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Do a cash flow projection. How much cash flow does the property generate as a rental now? If you sell and purchase 5 properties, how much total cash flow will they generate?

I am guessing your cash flow will be much better with 5 properties plus your vacancy risk will be spread over multiple properties. If so, then the numbers favor selling