Two properities with mortgages...what should my next move be?

3 Replies

I have two multifamily properties in Cincinnati OH. Fully rented. Both have mortgages. I just started traveling with my job, but would like to continue to invest in properties. I have a management company managing my two current properties. Should I save up to buy my next property with cash? Should I pay off one mortgage before I invest in another property? I would love some feedback on what my next move should be! Also, pro/cons for single family houses vs multifamily houses in Cincinnati Oh? Thank you!!

No reason to pay cash. Keep going with conventional financing as long as you can. After you own several properties consider a blanket mortgage for a few props. You may run into a seller finance situation down the road as well. Keep your cash for more deals. Leverage is good just balance it with enough equity that you aren't overextended and upside down with a few vacancies.

Thank you so much for your input!! If you have any other advice please send it my way!

Im no expert, I read a lot of books about investing and only have one multi-family rental (4-plex)

From what I understand, leveraging is the way to go.

All things being equal, here is my break down:

My property was $240k = 25% down is $60k to buy it. With the interest rate at 5% my mortgage+ins+grass cutter = $1600, total rents is $3200. So I make $1600/mo cashflow.

I can pay mine off, mortgage is $180k balance, or I can buy 3 more (all things being equal)

so $60k x 3 = $180k to pay off first mortgage, giving me $3200/mo

or $60k x 3 more properties (all things equal) gives me $1600 x 3 cashflow = $4800/mo cashflow

that would give me $6400/mo cashflow instead of $3200/mo by leveraging with the bank's money.

Keep in mind, you have to keep reserves in case 5 AC units go out at the same time, ect...

Dont stretch yourself too thin. But that is my business plan. Also, you will have to start looking into different financing ect....

Hope that helps

-Mike

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