Rental Property Investor · Norfolk, VA · Member since 2016 · 101 posts · 29 votes
Just curious what everyone perspective is in regards to current situation. I have 2 properties with total equity of 100k. These properties are clearing 600 a month in positive cash flow. Should I:
1. Sell my rentals for down payment?
2. Increase my rentals for a strong personal financial statement for funding?
Just wondering what everyone thinks. I have rehab properties for rental for many years and have sold them and now.starting over. I want to be goin into the right direction this second time around.
Appreciate everyone's input and time. Thanks in advance to everyone.
If the properties appear to be nicely cash-flowing, and your DTI is fine, then why not keep them.
I agree with Chris, If it is cash-flowing enjoy it. if you come across a property that can produce more in monthly cashflow I would 1031 it into that deal.
If the properties appear to be nicely cash-flowing, and your DTI is fine, then why not keep them.
I agree with Chris, If it is cash-flowing enjoy it. if you come across a property that can produce more in monthly cashflow I would 1031 it into that deal.
Do these 2 properties fit into your long-term investing strategy?
You're getting a 7.2% Return on Equity (ROE), which is...meh. If you were to sell and re-deploy the capital, you'd likely see a better return.
We can't answer the 2nd question without knowing your strategy. If these are SFRs and you ultimately want to own several 30+ unit apartment complexes, then, no, keeping these doesn't make sense. What do you really want to do?
Investor · FL · Member since 2017 · 247 posts · 245 votes
6y
@Freddie Williams Great question. It really does depend on your goals and investing philosophy. Personally, I would extract the equity out and invest in another deal for added diversification and to spread out risk. I typically invest in apartment syndications, but everyone's strategy is different. The point is, I don't like to have a large sum of equity sitting stagnant. Quick story...I remember years ago I decided to pay off my primary home mortgage so I could be debt-free. After a couple of months, I realized I could put all that home equity to work at 10% a year into several deals and spread out my risk and increase my cash flow vs saving 4% a year on mortgage interest. Nowadays, I typically invest with 50k increments in new deals. Best of luck!
Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
6y
@Freddie Williams it really all depends on your financial goals and how quickly you would like to achieve them. With multifamily you can accelerate your financial goals. There's strength in numbers. Not to mention the fact you can scale much quicker than you can in SFR. Good luck