What To Do With Sold Gold?
Phillip has 75 one-ounce gold coins he wants to sell. If he sells the coins, should he put it toward the mortgage or start rehabbing homes again?
QUESTION: Phillip in Tampa has 75 one-ounce gold coins he wants to sell. They should amount to about $90,000. He has three paid-for rental properties and owes $280,000 on his mortgage. If he sells the coins, should he put it toward the mortgage or start rehabbing homes again? Dave tells him to sell a rental house and sell the gold to pay off his house.
ANSWER: You’re either going to use this money to prime the pump on a couple more deals and then pay off your home, or pay this money toward your home.
I love real estate, and I love buying rehabs and flipping and all that. My mind moves toward deals. But now, before my mind moves toward a deal, it moves toward risk awareness because I went broke all those years ago. It’s not that my risk meter was broken, I just didn’t have one installed.
There is part of me that is pulled a little bit to both sides of this, but here’s my idea for you. Sell a rental house and the gold coins and pay your home off. That will leave you with two rental properties, a paid-for house and a $100,000 income. Then quickly pile up cash and use that to pay for your next house renovation and flip, as well as every one of them after that.
You might wait a few months until the market recovers in your area. Sell the gold this week. Don’t do investment real estate while you have debt on your home. Pay down on the mortgage and wait a few months and dump a rental property.