I’m thinking of selling my duplex in Los Angeles due to retirement. Do you think its a good time to sell when the interest rate is still high?

Thank you!

Yes, a good time. Interest rates are up but not that much. Prices are high there and people that can afford prices in that range most likely make enough not to worry about the difference because of the interest rates.

I own several Duplex's in Los Angeles. Miracle Mile 90036, Beverly Hills 90210, Koreatown 90004, North Hollywood 91601. Now is the PERFECT time to sell. But December and January the sales are slower due to the Holidays.

But in the next 10 months, values will decline 10-15%. Consult a tax expert. Federal Long Term Capitals Gains tax max is 20%. California is 13.3%. Recapture 25%. Medical tax if you make over $200K single or $250K married is an additional 2.9%.

If you do owner financing and get less than 29% down, it is an installment sale and you can defer you taxes to up the road.

Consider doing a 1031 sale.

Thank you for all the advice you are giving me.

We can't predict the movement of interest rates any more than people can't predict the direction of the stock market. The time to sell is when it makes sense for you financially.

What are your plans for the proceeds? If you don't need an immediate huge pile of cash, consider 1031 exchanging into a NNN commercial lease and let a property manager fill it for you. It's about the closest thing to true mailbox money as you can get in the real estate world. And keeps Uncle Sam out of your pocket a while longer.

Bought my first property during Jimmy Carter's double digit inflation. High is a matter of perspective. Rates today are OK. And since you are retiring, maybe you will want to hold some paper and make that "high" interest yourself. So that makes it a good thing.

Zizi,

My grandfather was a gardener. People always asked him WHEN to trim their fruit trees. His answer "When your knife is sharp."

Consult with your CPA to know your tax hit. IRS ALWAYS gets their pound of flesh. This might influence your decision.

1% list is now common and effective in my area. Another 1 or 2% to the agent who brings the buyer. 6% is not longer necessary.

Your buyer is either an investor - so prep docs to prove income,

or a House Hacker - someone who wants to live in one side and rent out the other unit to cover the mortgage and bills. In today's higher priced RE this is very common, esp among young people.

Interest rates are finally back to NORMAL. They were super low for a while but now back to normal.

When I sell, I get my own inspection and fix anything found, and a pro appraisal to know what it is really worth in today's market. Makes for a smoother sale and higher price to me.

BRAD

I really appreciate all the replies I’m getting. They give me comfort.

PS

Appraisal: on a recent flip I had 3 realtors suggest a selling price. They averaged $145K.

The pro appraiser documented that it's worth $175K.

I listed it for $185 and sold it for $180K.

A few hundred spent on the appraisal gained me $35K!