Advice on acquiring more real-estate in near-term environment

General Real Estate Investing
2yFollow

Advice on acquiring more real-estate in near-term environment

Patrick Gray
Member since 2024 · 2 posts · 0 votes

All, I consider myself a beginner in real estate investing, but savvy in business/finance. I have a RE LLC with each property in an RPT.

I own 3 LTR SFHs in North FL that I acquired pre/during-COVID. Estimate there is $280K-290K equity in the properties. What are the best strategies to use equity to leverage equity to expand acquire new properties? Follow-on, any recommendations on current attractive RE investment strategies are also welcome. I am agnostic on geography other than looking to stay East of the Mississippi and out high tax/high regulation states. 

Thank you all in advance.

0Reply
40 views

6 Replies

Jump to latestLatest
  • Terra Padgett
    Investor · Houston, TX · Member since 2022 · 126 posts · 122 votes
    2y

    You can do a HELOC on rental properties with some lenders to access the cash, but you're essentially taking more debt out on them. So you'll want to ensure your cash flow can cover the additional monthly note (assuming you still have a loan on them from the pre/during-Covid acquisition dates.) With your RE LLC, you could seek out a business line of credit to access capital for expanding. A SoloK is another fantastic option to access capital for buying more properties. This would come from any past employer 401k plans you might have that you can rollover to your self-directed Solo401k and utilize for investments.

    0Reply
  • Kerry BairdPro Member
    Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
    2y

    Cash out refi.  1031 exchange (sell and reposition).  

    0Reply
  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    2y
    Quote from @Patrick Gray:

    All, I consider myself a beginner in real estate investing, but savvy in business/finance. I have a RE LLC with each property in an RPT.

    I own 3 LTR SFHs in North FL that I acquired pre/during-COVID. Estimate there is $280K-290K equity in the properties. What are the best strategies to use equity to leverage equity to expand acquire new properties? Follow-on, any recommendations on current attractive RE investment strategies are also welcome. I am agnostic on geography other than looking to stay East of the Mississippi and out high tax/high regulation states. 

    Thank you all in advance.

    If you don't want to sell, cash out refinance with a DSCR loan is likely the answer. That's if the rental income can carry the cost of the new mortgage. Good news is the rates on these products have dropped dramatically in the last 3 months.

    [email protected]413-348-8346
    Freedom Capital Funding, LLC523 Reviews
    WebsiteView Page
    0Reply
  • Patrick Gray
    OP
    Member since 2024 · 2 posts · 0 votes
    2y

    Thank you all!

    0Reply
  • Alex Olson
    Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes
    2y
    Quote from @Patrick Gray:

    Thank you all!

    when you do a 1031 exchange you are able to rid yourself of the property without paying capital gains at the time of sale. If you love the property, keep it, if you don't, 1031 exchange and take all of your equity you have and get into a bigger or better or better located property. The 45 day ID window seem tight but it is not if you have a good agent on your side looking for properties and being in constant communcation. 
    0Reply
  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    2y

    @Patrick Gray, The first question to ask is if those properties are performing the way you want.  Are there potential gremlins like deferred maintenance or large capital expense looming?  If your financing resetting?  Are the neighborhoods deteriorating?  Has appreciation slowed?  The answers to some of these questions might make you consider sellling.  In which case the 1031 exchange would be your path because it opens up 100% of the equity in the property and the deferred tax to be used by you to purchase replacement properties of any type anywhere in the country!  That's a lot of good leverage.

    If you like the performance of those properties then any one or combination of the recommendations above might work.  Just be sure and stress test the aggregate performance of old plus new property with additional debt on the old property.  

    A marginal producer isn't likely to improve if you increase it's cost of finance.
    This is where you would sell and 1031.  But a good producer that has a small drop in performance because of additional financing that is offset by the performance of the new property is worth leveraging.

    The 1031 Investor5137 Reviews
    WebsiteView Page
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free