Payoff, Hold or Buy....

[Michael Greenberg]

I am a bit perplexed on my next move and was hoping to gain some insight from this forum. I am a current business owner in the IT sector and likely will be selling my business to focus more on my real estate properties. I am receiving a cash-out offer from my partners, taking it and running as a semi-retirement move at age 51. However my goal is to try and not touch this principal for living expenses, rather invest it or payoff one or both of my current STR's. I currently own (2) STR's and (1) Small Office Building. The STR's have mortgages, the commercial property is free and clear. The Commercial Property currently provides more monthly income stream than the STR's (mostly because it's free and clear), however without the STR mortgages it will be about the same. So my question is: Should I use the cash from the business sale to pay off one or both STR's, buy more STR's, roll the cash into another commercial property (would have to 1031 exchange the current commercial property), sell it and buy a larger commercial property, or.....? I've done some of the financial analysis and there are lots of moving pieces to consider so I'm just looking for some general feedback, creative ideas and thoughts. Thanks in advance.

[Jason Hirko]

@Michael Greenberg I would keep everything as it is, assuming your leveraged properties are positive cash flowing, then I would take the cash-out, put it into a low-risk stock portfolio, and then get a securities-backed line of credit against the stock portfolio (at 50% LTV) and use that to buy more cash-flowing, appreciating properties.