Need help i have 50k but i am stuck
so i have 50k....1 airbnb home that needs renovation to make more money....3 other rental properties..1 is paid off the others has mortgages...I want to refinance one property in order to purchase a multifamily home in which i havent found yet...should I only have 50k liquid cash though, everything else is tied up...what should i do? I do want to invest in my airbnb to increase a little more revenue however I dont want too put all of the 50k in there ....the point is i need more income, im not making enough with what I have any suggestions???
Most Popular Reply
Howdy @Sade McLean
You need to sit down and write out the pros/cons on taking action with each property. Something like this:
Cash Reserve = $50,000
A. AirBNB property - Needs $$ update to increase rental income to $$$
B. Rental #1 - Paid-off earning $$$ income.
C. Rental #2 - Mortgage earning $$$ income.
D. Rental #3 - Mortgage earning $$$ income.
E. Future purchase - $$$$ All-in cost
Questions
1. Where did the $50K come from? Vacancy, Maintenance, CapEx withholding? Cash-Flow income? Other.
2. How many need CapEx updates in the near future? Estimate of Cost? Are you currently saving for those costs? Is that part of the $50,000?
3. Have you started analyzing for the new property acquisition? Budget?
Options:
1. Use money from $50K reserve to update Property A.
2. Get a Line of Credit to use for the update
3. Home Equity Line of Credit for Property B to use for updates/repairs/help purchase new properties
4. Get a Cash-out Refinance Loan on Property B to help purchase new property.
Then start going thru each to decide what is the best use of the Cash Reserve and if option 2 - 4 are possible. Remember if the Cash Reserve's original purpose was to cover any of the items in Question 1 you need to think about it before using it for something different.