All Forum Posts by: Nathan Frost

Your byline says Wichita Falls but your topic line at the bottom says Lubbock.  Where are your investments?  I love Lubbock Longterm.  Don’t like Wichita Falls.  But each will work with different strategies. 

You might try different strategies:  Don't answer.

1. You have equity in your house. Sell it as a primary 2/5 years no taxes. Move into one of your other units you can get the most value from an ADU or BRRR then 2/5 it. Depends on your family situation. Job and

Home location do they need to be close?  Etc.

2.  Your in Texas, use that to your advantage..    
 
3.  If in Wichita Falls start a trailer park.  Rent the lots and not the homes.  No zoning in Texas counties.     

4.  Texas property tax sales. Buy the unlisted properties.  Pick nasty or strategic and flip.   Land only and not houses.  This is to get more cash around you.

5.  Map out your end game or expectations. See which path will get you there and the resources needed.  

@Nathan Frost  Hardest part is they are all tenant occupied.

Now they are all occupied just sit back and relax a little. You can accumulate some cash just be patient and stop spending and buying. When one becomes vacant analyze it and see if rehabbing it would make you a profit to sell or maybe selling as is to get out from under if it is a loser overall.

@Nathan Frost - there is a lot of solid advice already on this thread.  

I would definitely not buy additional houses right now when the properties you own are already giving you sleepless nights. 

Of your properties, are any of them in A or B neighborhoods that at least break even after property manager expenses, insurance, property taxes, and capex?  Those are the properties you should definitely keep when you decide on properties to sell.  A and B will typically have more potential for appreciation and solid renters.  Obviously, if you own anything in an upcoming area or transitional area, best to keep those as well so long as they are even or better.  Good luck.   

 *Do not* buy more properties in an attempt to minimize cash flow issues. You will only be digging a bigger hole. In general, your acquisition of properties should never outrun your ability to put aside or access comfortable reserves to maintain those properties. If you follow any of the troubles syndications are having right now, that is a primary problem they're running into - their reserves and cash on hand are insufficient to both repair/maintain the existing properties and maintain required reserves for their debt financing. 

Selling good performers is also usually a losing strategy. Don't try to prop up poor performers by divesting good performers. If anything, you should be doing the opposite. 

Your first step is to really nail down why your portfolio homes are performing poorly. If their only problem is too much leverage (unlikely unless your lender let you borrow greater than 80% LTV), then you can probably fix that with what's on hand. If that's not the only problem, then your strategy should be to stabilize or sell the propert(ies) that are causing problems. This may require discussing breaking up the portfolio loan with your lender such that you can sell those parts dragging you down. This shouldn't be as complicated as it sounds as every home is going to have a separate lien filed against it for a specified amount of money.

EDIT: After reading all your other posts, a couple of other thoughts:

1. Don't do the HELOC. You don't have a portfolio that warrants adding more debt especially on your primary.

2. A couple of your portfolio homes look like they're upside down. No idea what they rent for but those would be good candidates to divest if you can cover the release. 

3. If you don't expect any appreciation or rent growth over the next 5 years then you have homes in some rough areas and should consider selling all of those homes. 

@Nathan Frost

You will need to talk to the lender and see if the release price on the other loans still covers the balance.

End of day lender wants to make sure they are not left holding the bag when you get down to the final assets

 Then sell … 

Over leveraging is dangerous path for REI

 Create structured business calculation in term of DSRC and calculate the market asset valuation vs your equity and do what if strategy.

What happen if you sell the most performing asset and what happen if you sell the baddie ..usually the worst performing would stabilize your portfolio.

@Nathan Frost

Thanks for sharing and sorry this is stressing you out.  As others have said, I can't tell how much variation there is within your portfolio.  Is every single one identical in terms of repairs and capex, and they all net exactly $200 a month?  That can't be the case.  Only you can decide what is right for you but it does sound like you should at least consider selling the worst performer.