tl;dr: own a small 1 bed condo ($950k) in a high growth ZIP code, want to upgrade to a 2 bedroom condo in a new build with workspace in same are, but not sell, have around ¬830k in brokerage account I want to get an SBLOC against for downpayment. Offered a mortgage at 5.5%. Anything missing, is this sensible? I have no other plans for brokerage money, and feel cramped in current apartment.
Net Worth: ~$1.3M
Current Housing: Own apartment ($930k value, $670K mortgage @ 4.5%). Monthly PITI+HOA is $4,750. Market rent is $¬4500 – 5000.
2. The Opportunity
Target: Buy a new larger primary residence for $1.4M.
Financing: 20% down ($290k) via Pledged Asset Line (SBLOC) against my brokerage portfolio to avoid capital gains tax. Mortgage balance ~$1.04M (7/1 ARM @ 5.5%).
My plan:
Keep Old Apt: Rent it out ($5k/mo). Tenant covers 100% of costs.
New Apt: Live in it for 3-5 years.
Direct 100% of RSU income (~$11k/mo) to pay off the $270k SBLOC within 24 months.
About to make offer on second condo for 1.3M, can anyone sense check my math and logic? Am I missing anything?
byu/brevit inrealestateinvesting
Posted by brevit
3 Comments
Don’t lose your job
I think you should sell the first place because if you rent it out itll be negative to zero cash flow and very thin profit margin (and that’s assuming immediate tenancy). Unless there’s a Covid like real estate value boom in the next few years it seems like your best move, strictly financially speaking, would be to sell your first place and use that money for the new place. Also being a landlord isn’t passive income necessarily so you need to factor that in.
I second with selling. And I’m the type to keep the house even if it’s a small loss. Why? It’s a condo you have no idea what tomorrow will bring w the HOA and potential for special assessments. As a condo owner myself I have ZERO plans to ever buy another condo again (Miami).