Sell duplex for debt payoff?

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Invest2016
Posts: 18
Joined: Fri Nov 25, 2016 2:34 am

Sell duplex for debt payoff?

Post by Invest2016 » Sat Jun 23, 2018 5:26 pm

Gang,
Thanks for all your help. I found this place a few years ago and it has changed my financial trajectory.
I am thinking about selling an investment property to clear student debt and auto debt.
35 years old with great job for a few years that is very stable.

Financials - I make $400k. Make 401k with 25% match, BDRIA, $2,500 a month into VTSAX. Not interested in messing with this at all. $80k emergency fund.

Debt. Mortgage $340k worth $650 or so 3.75 rate. 2x autos for $50k at 4%. 80k student loans with Sofi at 3%. Payment of $2100/mo.

Here is where my question comes - I bought a duplex in August 2016 for $225k. My real estate agent friend said it is worth $320k today! I put 25% down so after fees I would get back $130k or so. (Taxes would be owed as well).

Rents $1900 mo. Payment of $1020. This is before any problems.

I could sell the duplex and payoff all student loans and auto loans. I would just be left with my mortgage! This would clear $3,000 a month in payments off the books. I could then increase my mortgage pay down or money flowing into the market or a little of both.

Would you sell the duplex and pay off the debt or just stay on tract with my current situation. Some of you would say to dip into the large emergency to pay of some debt and keep the rental. I get it but I am feeding six people and I am the only one that brings in income.

mhalley
Posts: 6012
Joined: Tue Nov 20, 2007 6:02 am

Re: Sell duplex for debt payoff?

Post by mhalley » Sat Jun 23, 2018 11:56 pm

Do you like being a landlord? Either scenario (paying loans as agreed vs selling and becoming debt free) depends on your personal feesings about being a landlord and attitude toward debt. Be sure you have your disability and life insurance in place.

Nate79
Posts: 3324
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Sell duplex for debt payoff?

Post by Nate79 » Sun Jun 24, 2018 12:23 am

You make $400k. You could pay off your student loans in 6 months if you got on a budget and cranked down. I wouldn't sell the rental for this reason. I would use your income to get serious about the debt.

AlohaJoe
Posts: 3687
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: Sell duplex for debt payoff?

Post by AlohaJoe » Sun Jun 24, 2018 4:07 am

You make $400,000. You don't need to sell property to pay off your $80,000 school debt.

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