Maximizing my portfolio

[Menachem Krasnjanski]

have a question in terms of my portfolio. My partners and I have a property that appreciated 50 percent in value this past year. I got an offer for SBA financing off of the new equity that can be leveraged to triple our portfolio, but it 1) comes with a personal guarantee and 2) is tied to the prime rate which is high. The property would cash flow well and give us a great cash on cash. My partner wants to sell the property and hold the cash in the bank while waiting for enough of a dip that we can get a really good deal with the profit. Which way makes more sense to proceed. Thank you.

[Carini Rochester]

A) How do you know there will be "enough of a dip?"

B) Capital gains hit on your taxes if you sell.

C) Sell using the 1031 roll over, (to avoid the capital gains tax) but there are strict timelines you must follow in identifying a property and then on closing. It sounds like your strategy will not work with strict timelines.

D) while the money from the sale is in the bank, it will be collecting interest at (probably) lower than inflation.

E) unless you are confident that you can quickly identify the roll-over property, taking out the loan makes more sense, except for the relatively high interest rates currently being charged. (And it sounds like it adjustable-rate, so it could go even higher.)

These types of decisions are really property dependent. Depends on the specifics of the property you already own and the property you will buy. These types of