Looking for guidance - here’s the scenario, your thoughts?

[Craig De Borba]

Hi All,

I’ve been learning a lot reading though the threads in this community and finally have something to post about.

My background: RE appraiser and loan financing way back pre-2008 crash, helped family landlord multi-units while growing up.

Situation:
Inherited a duplex but thanks to the change in California Prop 19 it will be reassessed to current market value. This reassessment will be a 1,000% increase in property taxes eating the cashflow. There is a mortgage on the property for 20% LTV (~3.7% int rate). I hope the rate passes and is not refi to todays rates, but I don't know how that process works via a Trust.

My plan: 
Sell this property and use as a seed to build a portfolio out of Calif. that I can retire with in 5-10 years, and eventually turn these 2 doors into 20 someday.
Due to current interest rates + tax reassessment, cash out refi to acquire more units will make it negative.

Some basic location criteria
1. States where I can get more for my money. I think I can turn these 2 doors into 8 or more.
2. States that are landlord friendly
3. Lower property taxes, good economic growth, low unemployment

I live in Texas but prices here are getting really high, unless I am looking in the wrong area. Other out-of-state areas I have seen mentioned in the forum are: Ohio, Arizona, Oklahoma, Arkansas.
Any suggestions for geographical location?

Starting with $500K cash + financing I could increase purchasing power to acquire more units vs. paying all cash.

Would you put the min down payment (20-25%) and finance the remainder or pay all cash and not carry any debt?

The properties need to cashflow or at minimum pay for themselves, because long-term goal is to replace my job income.

Considering circumstances and long-term goal, how would you do this?

Thank you