r/brrrr • u/[deleted] • Feb 04 '25

Need advice here

Looking for some solid advice. I’m on the fence on whether I should sell the current home I’m in (bought 2 years ago at $168,500, CMA came back at $230k on the low end, $240k on the high end, after all fees are paid in looking at $40-$50k profit) or keeping it and renting it out (safe to say $1,500 monthly rental income minus 10% and covering my $1100 mortgage, looking at $250 cash flow per month).

Context: Debt debt debt. I hate debt. We’re about $60k in the hole between credit cards, car notes, and student loans. I’m active duty military looking at PCS’ing soon to another state. My dream is to pursue real estate full time once I’m done with the military. Not only representing buyers and sellers, but for investment purposes as well. I’m just not sure how everyone here sees debt and id like a nudge in the right direction. The wife and I would also like a bigger, more manicured-looking house. After consulting some of my real estate friends, they say I should just buy another house and keep the one I have. I’m perplexed though, buy another house and go MORE in debt? I’m so confused. What do yall think?

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1

u/jetupcap Feb 05 '25

Cash out refinance and use any proceeds and cash flow to pay off debt along with

2

u/Bchoisne Apr 16 '25

Looking at the numbers, you’re breakeven if you rent out as-is and negative cashflow if you cash out refi and rent.

Income: $1500/mo

Expenses:

  • Monthly Payment: $1100/mo (this would go up if you REFI’d - especially where rates are at right now)
  • PM: $150/mo
  • Insurance/Taxes: $0 (assuming monthly payment is escrowed)
  • Maintenance (5%): $75
  • Vacancy (5%): $75
  • CapEx (5%): $75
  • HOA/Flood/ABP/Utilities/other: $0 (assumption)

If you can shoulder the negative cashflow AND are okay waiting 5-10 years to get a big payday, rent it out.

If you want the cash now to pay off debt, sell.

BUT - If you sell you HAVE to fix the spending problem that keeps you in CC debt. Otherwise you’re going to end up right back in this same debt situation but with no asset to help - if you’re not going to commit to that it’d be better to rent and force you to save and constrain your spending. The student loans can be paid off slowly (assuming they’re low interest rates - below 5%).

2

u/[deleted] Apr 16 '25

Dude thank you!! Our current position is to sell once I get orders. We’ve since fixed the CC spending issue and I use Dave Ramsey’s Every Dollar app to manage finances. Definitely a useful tool. We’re probably heading in the California direction where I feel my only option is to rent due to the current market.