Looking for help moving forward, first time forum poster!

[Aaron Buehler]

Hey all! First time posting, my wife and I are fairly new investors. That being said, we have owned a fourplex in a small town in Michigan for about 10 years but had no guidance when we purchased, I have found all the information Bigger Pockets offers extremely helpful and I am grateful in advance to any advice on this thread. We operate a small retail business out of commercial space in the building with the 4 residential units, which pays me a W2 salary and my wife has a part time W2 job at a vet clinic.  About 2 years ago I decided to become a licensed real estate agent in Michigan and have had a fairly successful first couple years doing that full/part time.  

As I've learned more about analyzing properties I have quickly discovered we had to make some changes to our current rents and with changes going into effect next month the property will cash flow around $675/month, we only have about 7 more years on a small lean we have on the building, after that it should cash flow around $1000/month and be paid off with no leans. 

In 2023 we bought our first single family fixer upper, we bought it cheap with cash in an area about 2 hours from our current home. Over the last year we have been working on rehabbing the home which has, like most projects turned out to be a bit more than expected. The project will most likely end up costing us $10-15K more than we originally budgeted, this comes from being new to all this and not knowing near what we know now! The good news is the home is in a great location and we should be well under appraised value with the purchase/rehab/holding cost. The plan for this home is to try it out on the STR market for a few years OR possibly cash out on the investment as I do feel we could sell for much more than we have invested.

To hold and STR or to sell the current rehab project is one question I am reaching out for advice on. The area looks to be a decent area for STR rentals and has potential to be a great investment if that goes well, we won't have a mortgage on the property so outside of taxes/insurance/utilities it should be easy to cash flow. If we held on to the home, and are able to establish a decent rent rate/month through STR or potentially even LTR, my thought was to then move forward with a cash out refinance with a 30 year set rate mortgage and only take out enough equity to keep the monthly payments at a rate we know will cash flow with our established rent rate/month. Again, new at this, so I hope this all makes sense!

Next question, we are currently reviewing another property as our potential next buy. It is another single family rehab project in a similar area as the first but a much smaller rehab than the first project! I have access to funds through my HELOC on my full time residence to make a "cash offer" but as most HELOC's go the rate is not great. If we were to move forward with the purchase of the second single family I do think we would be able to Brrrr this property into another STR, again if that is not successful we could always sell and make a profit (purchase + rehab should be about 75% of appraised value if goes as planned). Being a licensed agent obviously saves me the commission loss, but I would like to at least hold more than a year to stay away from short term capital gains taxes. If we sold either property (current rehab or potential next) I would most likely look into a 1031 for the next property.

Thank you for taking the time to read through the "mess" of real estate investing we have going on at the moment. I am excited and nervous to hear what experienced investors will say about the situations I have going on. My wife and I are excited to continue to grow our portfolio but neither of us truly want to "retire" early. We, like many investors would just like the financial burden to be somewhat lifted off our shoulders and to not feel so tied down to our jobs but have the option to come and go as we please or are needed and to spend more time traveling with our family! I think we can do this and I am hopeful we are on the right path.

Thanks again, 

Aaron