The next move - What to do?

1 Reply

Hello BP Forum'ers,

I haven't posted in a while -- but wanted everyone's take on a fairly common question, but with the uniqueness of my actual numbers, figures and situation

Goal -- grow passive income quickly through buy and holds -- my market is Upstate NY and I presently own 7 units total spread over 3 properties (2 doubles and one 3 unit) Initial goal was to acquire 8 units/year x 5 years all netting (before income taxes, but after my debt service payments and all other expenses) $200-250/month/unit so around 10K and month in "passive" income from 40 units. I commenced in Dec 2013. So far, so good. I do have my properties managed.

I use a combination of "rollover" rental income (basically taking any net income and plowing back into the next purchase, snowballing maybe?) and existing cash reserves from a part-time position I have, to fund my purchases. I do not do, at least not yet, no or little money down ventures......although maybe I should look closer into that.....(and read the recent blog entry on the subject!!!)

I have around 20K right now to use towards the next purchase. I have a portfolio lender and no # of mortgage limitations. Just looking for some takes here ---

Option 1) I have a potential deal for a 4 unit grossing 2200/month in B area with B+ property. Would exhaust 20K on this one, and increase net per month profit by about 1K to roughly 2500-3000/month net for my entire portfolio.

Option 2) I have two separate doubles as an option (on in 40s, one in 60s) B to B- areas and B to B- properties, both would net $500-600/month. Could buy one or the other or both.

Option 3) I have been scouting a "larger" (for me) play at 10+ unit apartment buildings. Thought would be use combo of 20K and private/family loan $$ to get into a larger property, cash flowing at some economies/cap rates as my current props and accelerating cash flow. This is of most interest, but with the 'newness" of this type of deal for me, I have some trepidation. 

Option 4) Wait a little while longer 3-6 months, build some more down payment $$ and look to make a move then....

Option 5) something different entirely?

Back to goals -- quicker acceleration of cash flow is probably my overarching goal.  Thanks for feedback!

Hello Ian,

I find myself in the same situation, I, with my partners have 7 total units and we are looking for another that makes the most Sense. Right now, the 10+ property would be the biggest interest to me too as it would increase your portfolio the fastest.

How is the area and building itself? Any room to gain equity after purchase?

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here