Cash, equity, or both??
Hello, I'm brand new to BP. I just started listening to the podcast, and very excited in learning from anyone willing to share. I currently own two rental properties, and my goal is have a passive income of $100k in 5 years. My current properties are in good shape & in good locations (Chicago & Summit County, CO by the ski resorts). They both yield $600 monthly a piece ($7200 yearly) after mortgage and bills. I know it's subjective depending on your situation/goals. But I could use some advice on cashing in on my equity, or using some of my own earnings ($355K) to finance the next deal(s). Ideally I would like to purchase an apartment building with 6-12 units in Dallas, Vegas, Nashville, Atlanta, and maybe the Carolina's. But open to duplexes or 4 unit properties that makes sense...and money of course!
I currently owe $135K on the condo in CO., and can conservatively get $440K for it without a realtor. I'm not looking to sell it though. But if I took the monthly positive cash flow and put it towards the principal, it would be paid off in about 14 years, and would yield over $25K a year. So you can see there are many ways to use this vehicle. I can pull some money out, and still generate a couple hundred dollars each month, or hold it and leverage my Chicago place which will never get paid off (owe $276K - appraised at $470). My initial thought was to sell Chicago, and 1031 exchange it into the apartment building. My lender is telling me they can lower my payment by $150, and take out $55k to use. That, plus 2 units are long over due for a rent increase and could be generating about $400 more a month.
I'd appreciate any advice on how to achieve my goal. Or basic investing guides to live by and be successful when there's a good amount of equity built up.