Cash flow strategy, education, funding and 1031 exchange
Hi all,
First I'm a newbie to Bigger Pockets so this is also a quick introduction. I'm based in San Francisco and have been investing in real estate part time over the past five years, having purchased in total three out of state rental properties (Vegas & Phoenix, one condo and two SF) and holding them for past five years. The purchase timing was good and though I made a lot of mistakes and had my fair share (and then some) of unfortunate incidents (replacing roof, flooding, water heaters, bad tenants, etc) during the past years in terms of managing the properties, I have learned a lot and made a nice cash flow and all properties appreciated significantly. I sold the smallest property last year and now looking to sell one of the single family homes I own in Phoenix and hopefully get into multi-family units and do a 1031 exchange. I've also participated in a few syndications.
A few questions that I was hoping the community could help me with:
1) Strategy - I'd like to increase my passive income over the next year from ~2K/month to at least ~5K/month which should cover most of my living expenses. The question is what is strategy is best to move forward? Over the years with all the troubles I had I thought it's best to move towards passive investments with syndications. I've had luck with those so far. That said, lately I realized that I'm actually not bad in handling my properties and if I changed my mindset slightly I can actually continue active management but double down and move into multi-family. It's been very clear early on that having a handful of SF is not diversified enough to absorb shocks to cash flow from big ticket items such as the ones I've dealt with (flooding, etc). So a few questions:
- What strategy to move forward to increase cash flows quickly given I have a lump sum in my hands and experience with active management at least of SF homes - should I move to syndications or build my own managed portfolio? Is multi-family the best direction or other asset type?
- How much time do you think it'll take today to build such a portfolio - I am currently in between gigs so should I focus 100% of my time now on finding the best deals and get the portfolio stabilized for the next few years, or should I find a job and continue doing the real estate on the side. Said differently, for a new comer to MF, is it reasonable expectation to be able to get in multi-family while working full time and how long in today's market (and I know this is a very generic term but I'm open to any geography) would it take to secure one, two (or more) multi-family properties. I assume most of the leg work on the ground would be to find the right realtor, property management, contractors and properties but once team is in place hopefully most can be done remotely.
2) Education - I've started to educate myself on the many options and reading books, listening to podcasts, etc but am a bit overwhelmed right now. Any pointers to good reads that can get me up to speed fast would be most appreciated. Also, any specific podcasts, forum threads on top.
3) Financing - Given I don't have employment income at the moment I heard that I'll have to rely on cash only to make first purchases so if I managed to do the 1031 exchange I should have ~$300K of all goes well, and I can also add from my stock portfolio and sell other SF so I can potentially double that if not more.
4) 1031 exchange - I've never done these before. I've read about it a bit and seems like I need to find around three properties asap in order to actually get it done if I plan to the SF on the market in the immediate future. Given the current market, is that a reasonable expectation? It seems like finding a good deal and building a team from scratch would take months so either I delay my sell plans (and perhaps rent month-to-month in meantime) or forego 1031 exchange. Thoughts?
Sorry for the long post. I welcome any advice, tips or leads per above.
Thanks!
Ron