All Forum Posts by: Brandon Malone

Hello Biggerpockets Community. What method (Cash-out refinance, HELOC, or Sell), do you utilize to continue your investment strategy when you have equity. I currently have a few properties, and with the market appreciation in the DC metro area, I have about $100k equity in each property I own (four total, nothing compared to what I read on here), and as such I want to continue to build a buy/hold portfolio, but at same time I'd also like to have some money available in case the market takes a turn, in order to be able to make some moves. With that said, what strategies do you use to continue your investment strategy and why?

@Thomas S. Investment debt from the last rehab I did. 

Hello Biggerpockets Community. What method (Cash-out refinance, HELOC, or Sell), do you utilize to continue your investment strategy when you have equity. I currently have a few properties, and with the market appreciation in the DC metro area, I have about $100k equity in each property I own (four total, nothing compared to what I read on here), and as such I want to continue to build a buy/hold portfolio, but at same time I'd also like to have some money available in case the market takes a turn, in order to be able to make some moves. With that said, what strategies do you use to continue your investment strategy and why?

The D.C area market is challenging at the moment. I took off 2017 to pay off some debt, but in 2018 I have two goals:

1. Continue to pay off debt

2. Purchase another buy/hold or do my first flip. 

If market conditions does not make #2, possible, I'll be happy to accomplish #1 and look for avenues where I can invest to put some cash to use. 

@Francis Dinh I bought a property very very similar to your numbers almost two years ago- mainly for the appreciation. I bought the property for $245k as a shortsale, and today it's worth about $330k. I have a good handy man that charges me extremely well. I put $10k into fixing the property. Like you I was expecting to rent it for $1800, but truth be told I ended up renting for $2000 ( part of that is a monthly pet fee I charge). I also self manage the property. Simple because tenants contact my handy guy and he handles everything. My taxes and insurance weren't quite as high as what you have, but I can so very clearly tell you that you have completely under stated the maintenance cost. I'm currently cash flow positive of about 400-500. I'd like more but DC market is tough. 

I live in the DC metro, and while I'll never say something is impossible, I can say that I've never come across 2%. Getting 1% can even be a challenge around here. Usually the 2% deals I see come with substantial capital costs to prepare the property to market. 

With three rentals in the DC area, all cashflow properties, I also question whether I'm too leveraged. In the DC market, properties tend to be high so finding properties for under 200k is a challenge unless you want to go to the D class neighborhoods. As such, the carrying cost can be high.  To a degree, I agree with some of the comments that the more cashflow properties you have, the less of an issue that becomes. I suspect you will have to come up with your own rule by looking at your carrying cost, the average turnover period in your market, the average cost to prepare your rentals after a tenant moves out, and how many of your units you believe could become vacant at the same time. 

@Vivek Khoche Thanks for the feedback. I bought one property each year for the past three with the exception of this year, due to to finances. I'll definitely check out the articles. 

@Russell Brazil The three properties are not generating the cashflow I'd like, however currently the total stands around $1300 net. It's difficult to strike high numbers in the DC metro area.