Selling House #1

So we've decided to aggressively sell house #1.  Our monthly income on the house is only $142.50/month.  The problem is, for refinancing, the bank requires about 75% equity (which we have but that's all we have), so we can't take anything out or that would be our choice.  If we sell we stand to make about $20k in cash that we can put towards 2 other homes we've identified that have the potential to cash flow $400+/month.

So with no new dollars (or very few new dollars) we can essentially turn $142.50/month cash flow into $800+/month cash flow.  Our adjusted basis in the house is only $64k (we bought for $70k), so when we sell we have at least $10k of pure tax-free profit.  We only have to pay capital gains tax on the remaining, which when split between the 3 of us is pretty easy to do.  That's only $1,500 on the other $10k we're expecting to make on the house.

Wonder why real estate is a great investment?  We're going to sell a house and make $20k on it and only have to pay $1,500 in taxes.  For those of you who don't want to do the math, that's a tax rate on the sale of 7.5%.  Try and find that in any other medium besides real estate!

Stay tuned, I'll let you know how it goes.