Current rental is “ON” Long Island in Nassau county I paid 385k in 2018 I get 4000k a month that covers mortgage and interest with 1100 left over in profit monthly I owe 320k on the mortgage that is at 3%
I can sell now as is for 725k walk away with around 400k that I can 1035 into a new property with a higher interest rate or 10% hit with taxes and put into my new house I’m
Going to build for myself… probably made 50/60k in rent profit over last 5 years but have done maintenance like roof and heating ect out of that profit …) ( seems like the worst option)
Proposal build a 3400 sq ft house and sell for 1.55m to 1.6m going to cost me around 600k with construction loan interest… walk away it 680k on the high end to 600 on the lower end I can 1035 with no taxes or take a 10% hit with taxes so walking away with 600k to 550k (probably made 50/60k in rent profit over last 5 years minus maintenance and upgrades – but will not have rental income for the next year… currently monthly mgt is 2850)
How do I figure out if it’s worth it to
Sell no or keep as is or build and sell…
If I sold after construction I’d use that profit to
Build myself a new primary residence on land that I own free and clear new rate would be around 5.5% at 600k
Thank you in advance
Keep rental or build and sell
byu/Euphoric-Li inrealestateinvesting
Posted by Euphoric-Li
5 Comments
[deleted]
If you’re planning to sell regardless I would take the cash now since it’s guaranteed. I propose maybe rebuilding and renting and then refinancing to get cash for your new home? Check this analysis I did you can play with the numbers too I just punched in over the phone now [analysis for build rent and refinance](https://landlocklending.com/real-estate-development-loan-calculator/report?landCost=385000&hardCosts=600000&softCosts=25000&constructionDuration=14&salePrice=1600000&originationPoints=2&buyClosingPercent=0&sellingCostsPercent=6&monthlyHoldingCost=700&refiLtv=40&refiInterestRate=5&refiPoints=0.5&monthlyRent=6000&vacancyRate=3&otherCosts=on&exitStrategy=rent&rehabGuardrail=off)
Selling now is basically the worst of both worlds because you lose the passive income without getting the maximum payout from the build. You would be trading a legendary interest rate for a much higher one on a new property just to sit on some cash. Unless you are truly done being a landlord, leaving that equity to sit in a 5.5% mortgage feels like a step backward.
Honestly, with your current rental cash flow and low mortgage rate, keeping it as-is seems solid—$1,100/month profit is nothing to sneeze at. Building and selling could give a bigger lump sum, but you lose that steady income for a year and take on construction risk. I’d run a detailed cash flow vs. one-time profit comparison, factoring in management, maintenance, and market uncertainty before deciding.
1035? I think you meant a 1031. So you have a QI lined up? I think you need to brush up on what the rules for one entail. Sounds like you need a real estate attorney and account and if you have them you need new ones. Those proposed numbers are pure speculation and then your current ones don’t make sense.