Hello all…first post :). I’ll try and make it quick.
Here is my scenario…self employedm(sign biz) looking to expand current rental property portfolio.
-Currently own (outright) (6) 3/2 SFHs (all in same neighborhood). Great area in regards to easy of renting the properties if needed. Rather low turnover so far. Have owned them from 2 years (first purchase) to 6 months (bought one every 4-6 months, make sense? ). Avg $900/mo rent
-Own primary residence with (newly acquired refi) $150k 1st mortgage (pulled $50k for future investments).
-Goal is to become full time (active at this point) REI, sell existing business (or become less involved in day to day ops).
Looking for advice on how to proceed. Diversify in multi-tenant or commercial? Pull equity from current properties? Jumped into this without much knowledge, and so far so good in regards to returns, but feel there may be a smarter / more efficient way to do this. The market seems to be almost dummy proof, but rather not take chances, and maximize return potential.
Feel free to inquire if I’ve left any info out that may help with advice.
Great board !!
Your properties should always have mortgages on them. Use the money from the mortgages to buy more properties. Right now you have about $5,400/month coming in from the rents. If the 6 properties are worth $100,000 each and you can pull out $50,000 each. You then have $300,000 cash to put down on more properties. If you have to put $20,000 down on each new house you buy you can now buy 15 more houses. You then have 21 properties each renting for $900/month. Minus debt service of $400/month gives you $8400/month. You double your money without going into your pocket at all.
I would add some tax lien certicates and do more marketing to find motivated sellers to get deals where you don’t have to put any money down.
Thanks for sharing this set of instructions. Really informative.
I would look to pick up a multi-unit or small apartment complex next. Beware, you may need to factor in a property manger for multi-units as well have grounds matenince to be concerned about.
You will want to have the mortgages and pull the money out of them to buy other properties. It is great if you can get a good duplex or apartment building where you can have units close together. it makes it so much easier in managing this way and you can look after other units while you are working on others in the same complex. You are not prying but eyeing your properties.