All Forum Posts by: Justin M.

Thanks for the feedback Bill. That would be the goal if I went with the option #2 route. I am still thinking about things. I do need to add more properties for sure. But, this one I was looking at selling is also the closest to being paid off, which would put a big dent in the independence goal. I'm not going to make any sudden decisions so just taking my time to get more thoughts and think things through.

Hmm, interesting. The property estimates are low $300's and it is in Northglenn, near 112th and Washington. I guessed on the low end it is worth $310k.

While I have owned (a) rental property for almost 9 years, I never really knew what I could get out of REI until the past year or so. I have since moved heavily towards investing more and working on growing my portfolio so that I can eventually be free from a 9-5 job. While I have been successful in that area, I have grown tired of the "rat race" and would much rather have my own businesses supplemented by my investments.

I am exploring some options for one of my properties that I've had as a rental for almost 9 years (owned it since 2002). There is about $200k of equity in the house and approximately 10 years left on the loan. It has been rented to the same great tenants going on 9 years and I don't expect them to leave anytime soon. 

I am trying to figure out the best way to start leveraging the equity and putting that money to work, without creating another payment for myself. I have been evaluating most of the common approaches but would be open to feedback or other ideas I missed?

My investing approach is long term buy & hold with a goal of eventually generating enough cash flow to cover my expenses. Time horizon is ~8 years. Or, basically, by the time I am 50 (preferably sooner) I want enough passive income so that I can quit my 9-5 and start doing my own businesses full time.

Thoughts below...

1. Cash-out refinance? With this, I could pull out enough money to buy another property in the Denver market, while still having the rent cover the mortgage. Or, buy more properties in out of state markets where my $ may go further. I am not sure a cash out refi is a good idea however. I have a 3.9% rate on the current loan which has just 10 years left and I would be going back into a 30 year at probably 5.7% rate.
2. Sell and ......   ? Another thought is to sell the house and 1031 that into a larger investment. I think this could go well if I invested that equity into an out of state multi-family where it isn't quite as expensive as Denver. Bad thing is this would most likely mean displacing my long time tenants.
3. Payoff? Keep the house as is and just focus on getting it paid off? I could use the cash flow from both my properties to pay this down quicker then start saving for more.
4. HELOC? I have pretty much ruled this idea out. as I already have a HELOC on my primary residence (that has $0 balance).
5. Something else? 

I think for long term my best bet is gathering as many (or bigger MF) properties as I can, so leaning towards either #1 or #2 and just getting more properties. Thanks for any input.

Lots of good info here. Still considering this option for my own investing.

I think around $3k is usually a decent estimate to go with. I paid just under that on my recent deal I closed in early January.

Welcome to BP! The podcasts are great and I would recommend reading some books as well. There are a lot of great ones on the https://biggerpockets.com/books page. "Rich Dad Poor Dad" is kind of the default real estate investment book that jump starts a lot of people, I highly recommend that one starting out. I did not read it until 9 years after I had become a real estate investor and it still made a huge impression on me. Best of luck!

Another approach is to look into markets where you have friends/family that can generate leads or work with local real estate contacts. This gives you a kind of immediate secondary relationship that might make it easier to start your "team."

I too am looking for OOS deals all the time because of our competitive local investment market, even though I did just close a deal here last month that worked out ok.

I think the ideal situation is to have "feet on the ground" where you are looking to invest. Instead of just picking a place based on properties, pick a place based on where you know people or have contacts. That's the way I do it anyways. That way you can ask them to go look, coordinate contractors, etc, until you can get there in person. Also, if you are a DIY type of person, learn how to do what the contractors do so you know what it costs roughly. That has also helped me a lot as well as I've done just about every kind of renovation on my own homes over the years, or been involved with the contractors doing the work as I managed it.

I also just bought the Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties literally a few minutes ago, so looking forward to learning more from that as well.

It is not really real estate related, but definitely mindset and motivation related. While I didn't directly relate to a lot of the stories, the themes behind them are powerful and really make you re-think where you are and what you've done in life. If you are like me and looking at ways to "start over" in life, or do something big and different, I highly recommend it.

Life's Golden Ticket: A Story About Second Chances