Hello BP Friends,
I want to reach out and get input from some that have more experience and a different perspective. My current situation is that I live overseas in Japan (active duty military) and have two rental properties in Jacksonville, FL. I want to expand my portfolio and am looking for the best next step forward. Here are the details
Worth 280K, Owe 207K
Rented for about 3 years now, cash flow only ~$100/mo
Worth 180K, Owe 124K
Rented for just over 1 year, cash flow ~$200/mo
I see a lot of equity with not a lot of cash flow, appreciation has been pretty good in my market but that won't last forever. My options that i'm considering are
1) 1031 Exchange these SFH into a MFH (2-4 units)
2) Hold the properties as they cash flow and rent well / low vacancy
3) Partner with someone on one of their deals since I am busy and live overseas
4) Renovate Property #2 to add ~150sq ft new construction and add a master bed/bath (It is a 3bd/1ba so make it a 3bed/2ba and is currently 1117 sq ft so making it 1267sq ft) there is a house on the same street thats a 3/2, 1250 sq ft that sold for $260k recently.
5) Other options I am not thinking about currently
Please weigh in, don't forget I live overseas so some things that should be easy are a little more difficult with time zone changes and building relationsships. What would you do?
By my math you're only making a 3% return on your equity. I ran into this same situation with a property. My initial CoC return was good but my return on equity was under 4%. I chose to exchange it and get more than a 10% return on my equity.
Sell both properties asap. They are duds...
Take the equity and buy 3 or 4 C class single family properties in cash. Start making some real money.
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