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Updated over 8 years ago on . Most recent reply

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Aaron K.
  • Fishkill, NY
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What would you do? Tons of equity in portfolio currently.

Aaron K.
  • Fishkill, NY
Posted

What's the best next move for me?  My portfolio consists of 11 doors in 5 buildings.  One building is 6 years into a 30 year mortgage, and we're breaking even on it.  The other 4 buildings are each 95% paid off (one is completely paid off) and the cashflow is great.  However, I would like to grow the portfolio and I'm wondering if I should double down with a cash-out finance on the 4 buildings that have equity.   I'm just not sure exactly how the math would work.  If I can wind up doubling the portfolio size and retain my cashflow that would be great, but I need to ensure I can then grow that cashflow over time as I begin paying down the debt.  Again, not sure exactly how that would all work out, I'm hoping some of the more experienced brains here can shed some light on the best way to go about this.

Thanks in advance for any insight!

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Steve Vaughan#1 Personal Finance Contributor
  • Rental Property Investor
  • East Wenatchee, WA
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Steve Vaughan#1 Personal Finance Contributor
  • Rental Property Investor
  • East Wenatchee, WA
Replied

I'm similar to your equity ratio, Aaron just with more doors.

I'm paying off all the commercial apt bldgs because they are in LLCs and annual reporting is a pain. High equity positions in LLCs doesn't scare me as much from an asset protection stand point.

That said, I chose to grow organically. I've taken all that cashflow and built up my acquisition fund. Sounds like you could choose to do the same.

If not, I'd avoid blanket loans. Too hard to unwrap. Congrats on having options!

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