Starting Out (Again)- How to best leverage what is available

[Nick Bennett]

We own a 2 family property in MA purchased as a primary residence with intent on buying a second, moving in to that one, sitting for a year, buying another one etc etc. Well, as we all know life has its curveballs and I met a fabulous woman who's a little older than I and wanted to get in to a single family & start our own- so we did in 2017

We are both eager to keep the real-estate dream alive of 15,000/month cash flow across 20-30 units.

Currently, 2 family is worth ~490-510K with 318k mortgage on it at 3.5% with cashflow of $1200/month fully rented(this will be increasing to 1400 mid 2018)

My wife and I both work full time bringing in 145k annually. Single family mortgage of 2200/month (yes this crushed my cash flow and ability to leverage a lot of the equity in 2 family and am fully aware and heartbroken) and about 60k in 401k/IRA's/brokerage and only 30k in equity at the new house after some improvements.

With interest rates recently climbing I've become more hesitant to refi on the two family, but see it as our only option short term to move my objectives forward.

1) Is a Cash-out mortgage/refi my only option?

2) We want to keep the retirement savings at a good pace but could stand to reduce it to get in to the next property (17k annually)… I know its relatively taboo but given circumstance should I be dumping this in to 2 family to get a better LTV or is the cash of more value all things considered?

3) I don’t want to take a loan on retirement accounts but is that viable path given how little we have in there currently & with penalties?

4) There are a number of markets that I can buy in but want to stick around MA given we have full time jobs (you could say I have 2 jobs in 1 with the hours I put in)…but given the cash strap but high cash flow I’ve considered exploring out of state investment/rentals…are there any unique challenges aside you’ve come across doing out of state investing that caught you off guard & wish you knew sooner?

5) When does it become relevant to incorporate ourselves/ what has been the best experience (S-corp/c-corp/LLC) for BRRRR investors? Especially with the new tax laws

6) Santander seems to be the only brick and mortar lender with HELOC for investments…any other avenues?

Summary of stats:

Real estate valuations: 880,000 (500k 2 Family 380k Primary)

Mortgages: 666,000 (318k 2 family 353k Primary)

LTV – 2 family is .63 Primary is .92

25k cash available

Credit in the 700’s

Currently not set up as a CO.

4500 in debt can and would be cleared prior to next purchase

Thanks in advance, happy I found this community and look forward to contributing and learning all the same!

-Nick