Access Large Equity in Rental Properties

[Michael Davis]

I have owned 2 rental properties in Roseville, Ca for about 5 years. The properties have no mortgages and 1 HELOC with zero balance. Rent is about $2k/month for each. Zillow and other estimates indicate a value of approximately $450K for each property. I am retired and manage the properties myself although enjoying that less and less and will probably turn over to a management company soon. This rental income is discretionary and is not needed for daily living (we generally use these rental income funds for travel).

My sense is that I could be doing much more with this equity.  My goal would be to increase monthly/yearly net cash flow, not overall net worth.

Are there investment (cash-out or other) considerations that would allow me to achieve increased monthly/yearly cash flow?  Present cash flow is income of about $48K/year with a deduction of about $ 9.5K for property taxes and insurance. 

[Gordon Cuffe]

@Michael DavisYou can sell the two homes and do a 1031 exchange to buy a multifamily property in a midwest city like Kansas City or similar city and state and easily acheive a 10% cap rate. So if you purchase a property for 900k, you should expect to take home 90k per year after all expenses including property management. You could sell the properties and take the cash to become a private lender earning 10% on your money. The only problem could be paying capital gains taxes.