How to re-invest funds if I liquidate properties

[Felipe Guerra]

Hello my name is Felipe and I'm new to big pockets -I want to get comments or investing ideas on the following. I bought my first multi-fam rental property in 2013 for $465k -I got a 30yr fix loan with 25% down. This property had a 20% cash on cash return since I bought it. I bough a 2nd rental on 2014 for $559k -again with an investment prop loan putting 25% down. This property had a 14% cash on cash return -lower because prices had increased. I bought a 3rd rental a duplex for $400k with same 25% down 30 yr loan -cash on cash return of 8% prices continued to climb therefore lower cash on cash return. At this point a have about $1.2M in equity and I was thinking on liquidating all properties to get the $1.2 and re-invest; however based on how much property cost has climbed I'm not able to get a good return on my investment; if I put the full $1.2M for a down payment the mortgage will be as high as my rents 2) if I buy cash a $1M property it would be around 7% cash on cash and would not get as much equity on property value (also I would not be able to use a 1031 exchange paying cash). Would you have advise on how could I re-invest my available cash or if I should just keep my properties as they are and keep saving for another downpayment or pay-down loans. Properties are located in San Diego CA and the Income I get after all expenses and prop manager fees is aprox $50k / yr. Please let me know if you can help and/or if I left out any information. Thank you! Felipe Guerra

[Justin R.]

@Felipe Guerra What would you hope to accomplish by selling your existing properties?  Are you trying to increase your ROE (return on equity) and ultimately increase your total return from your investments?

Unless you want to cycle out of real estate (expensive, given the tax consequences) or cycle into a different assset class within real estate, I would continue holding and operating.  And, that's what I AM doing.  :)