What would you do with $200k equity in a rental property? Getting back in the game

Question

Not asking to be spoon-fed, just looking for some back and forth about what more experienced investors would do in my situation, as well as what my own plan is:

Background Info:

• Familiar with real estate investing and the niche strategies
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• I’ve been focusing on career goals for the last decade so I’ve been out of the loop for a while
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• I own two rentals; one has about easily $200k equity, the other has less and is one I’d rather keep for now
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• I have about $300k liquid in stocks
• About $70k in my retirement fund of which I can maybe pull out $20-30k
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• Tens of thousands of dollars available on credit cards and lines of credit

Purpose of this post is to see what those who are up to speed with the current strategies and market would do in my situation.

Right now I’m thinking about performing a 1031 exchange on the $200k equity property and rolling that into a BRRRR property, using my existing credit lines to fund the rehab. It’ll be my first one and I expect to make mistakes and possibly a return that won’t be as good as the subsequent properties; not a big deal, just need to get the reps in.

It seems like raising cash to fund rehabs isn’t necessary due to my credit available, so there’s no need for hard money.

So, with all of this outlined, what strategies would you guys employ? I’m not interested in AirBnB due to the high effort involved. Was planning to purchase my first commercial property but at this point it seems like a better idea to learn how to do rehabs and build that portfolio.

Arman Ahmed · Answer

With your experience and the amount of equity/liquidity you have, I’d probably focus on getting the first BRRRR done well rather than jumping into commercial right away. If you’re open to investing outside Omaha, I’d also compare the numbers in the Midwest, especially Ohio. There are still markets where you can buy below value, force appreciation through a rehab, and build a rental portfolio without relying on STRs. The first one is really about getting the process down so the next few become repeatable.

Gregory Acs · Answer

You've got a lot of flexibility, which is a great position to be in. Before deciding on a 1031 or a BRRRR, I'd work backwards from your end goal. If it's long-term cash flow and portfolio growth, compare how each strategy affects your liquidity, financing, and ability to scale. Sometimes keeping more cash available for future opportunities is more valuable than maximizing leverage on a single deal.

I'd also be careful about relying too heavily on credit lines for rehab costs. Having a backup plan if the rehab takes longer or the refinance comes in lower than expected can save a lot of stress. If you'd like to compare a few financing scenarios or talk through which strategy might fit your goals best, I'd be happy to help.

Caleb Brown · Answer

I'd consider doing a 1031 and roll it into a small multi family (10 units and below). A BRRR is not a bad idea either. Both can work, BRRR is more moving parts and increased risk but feasible.

Lipa F. · Answer

Why not just buying a few turkey long term rentals with 20% down?

Demitri M. · Answer

That’s a good option; I’ll have to do the math, but I want to learn how to raise cash via rehabbing. Depending on the numbers I may be able to pick up a rehab project and then use the remainder for rentals, since only a certain amount of capital is needed for acquisition/rehab