All Forum Posts by: Michael Rivera

Hi Scott -

I agree with you.  It's very tough to find good deals in this market.  I agree that adding SF or improving properties to increase income is a good thing to do right now.  But I have considered 1031 exchange from this market to another with better return...

Hi JM -

I agree with you.  I'm not counting on the same rental growth unless based on improvements or additions to the properties themselves, though my properties are not up to current market value.  There is room to increase a bit, though I like to do it slowly through time unless there is turnover.

I'm just looking for feedback on getting the best return out of equity here and if it means selling or 1031 exchanging, feedback on that or how to with 4 properties.

Thanks.
!

Michael

Hi Everyone -

I'd love some feedback here.
I own four rental properties in Seattle that I have accumulated through the years.  I am looking for feedback on how to get better return on equity.  The four properties cash flow and there are increases each year, though the return on equity is pretty low.  Cap rates are low, generally.  See spreadsheet below.

Option 1: 1031 the properties into ones with better cap rates.  I've heavily considered this option, but it seems difficult to do this with 4 properties.  Also, I haven't found a good source of multifamily properties in the Seattle area with better cap rates.

Option 2: Just keep them as is.  Improve the properties.  Try to add on units.  Increase monthly income via improvements.  (This is the current plan of record.)  I'm considering lifting one of the houses to add a lower apartment.  Also considering increasing quare footage of property 3 and property 4 to increase income.

Any other options?

I just feel that I can be getting a better return on 1.5 mil of equity.

Thanks.

Michael

Hi Graham, J Scott and Russell -

Thanks for responding!

My goals are to increase ccash flow with an investment that will increase/retain value and appreciate through time.

With that, what would you do and why?

Russell, would be interested in apartments but no experience with that realm.  Would have to look out of my city for one and the financing would be new.  But would be open if it met goals listed above.

Thanks!

Hello BP Community!

I am planning on selling one of my properties because I believe I can find better use, and better monthly cash flow, with the equity.  When I sell, after all fees, $300k will be available as capital.  I have a few options and would love your feedback or ideas for other options!

Option 1: Paydown and refi a loan on another property by $300k to increase monthly cash flow by $1000.

Option 2: Buy one (or more) new properties with monthly cash flow of at least $1500.

Option 3: Use the $300k to lift a single family home I own and create an extra 2 br unit.  This would then be a duplex with a 4 BR unit up and a 2br unit down.  Via regular rent, monthly cash flow would increase by $2500.  Via AirBNB or short term, monthly cash flow would increase by $4000.

What would you do?  I'm leaning towards option 3, as this capital would increase cash flow most and also increase value of the property.

Thanks!

Michael

Hey Everyone -

I've been on BP for a few months. What a great site... a wealth of information for newbies and experienced investors. I love how engaged everyone is.

I live in Seattle and have 4 properties here. I have a full-time job and invest in real estate on the side. I'm ready to move forward with a 5th project. Have everything lined up and now just researching opportunities. I'm thinking outside of Seattle for some diversity and more bang for buck. Specifically looking in Tri-Cities (Kennewick, Pasco, Richland) and Olympic Penninsula. I'm looking at SFR and multi-family. I'm also curious about out-of-state, though that would be entirely new for me. I'm used to managing my own properties and being within driving distance.

Anyhow, I look forward to participating and thanks for all your contributions!

Michael

Thank you everyone for your comments here.

I've pinned down financing for my 5th real estate investment with a local mortgage broker.

I'm going to put off moving properties to LLC for now. Have good umbrella insurance for now. But LLC is still a goal. I have it as one of my goals and I'll pursue it.

THANKS!

Hello Everyone!

This is my first post to BiggerPockets.com. I love this site and the community. I'm from Seattle, btw!

I own three rental properties (1 single family, 1 duplex and 1 live/work commercial condo) and they are all cash flow positive and getting better each year. I'm now ready to take the next step and acquire more property for the business.

But here's the deal, I'm not sure my bank will finance me. I have good credit but currently all the properties, including my primary residence, are under my name. Will a bank lend me more money for acquisitions even though I have 1.7 mil in loans? Again, the properties are very cash flow positive and i have 30% equity, at least, in the properties. Do I just need to show the bank the numbers behind the properties?

Also, I would love love love to spin these properties off into their own business, like an LLC, so they won't be in my name. How did you all do this? Is there some way to do some sort of cascading payoff, where I take out equity, pay off one loan, move it to LLC then refi and take out equity to do the same for the others?

I'm ready to go to the next level and have resources to do so, but first I'd like to establish the foundation for the business and financing.

Thanks for your help!

Michael