Debt Free, Mortgage Paid off, Kids Moved Out, Now What?

[Rob Lee]

Here is the scenario:

• You are in your 40s and married
• You worked relentlessly for 9 years and you are now debt-free! (no consumer debt)
• Your mortgage is paid off (appx 380k)
• You guys are empty nesters
• You have invested in residential real estate with positive cashflow, but nothing to write home about! (about 8 doors, but there are mortgages)
• You left corporate to be an entrepreneur so money fluctuates right now
• You have about 85k on the sideline in liquid for an investment opportunity

What you do next in the current real estate market if anything? You need more cashflow! Asking for a friend! 😝

[Jaysen Medhurst]

With nearly $400k available (between cash and equity in your primary), you're in a great position to move into larger MFR properties, @Rob Lee. I don't know your market at all, but I'd be looking for $900k-$1.5MM properties with value-add opportunity. Something like this, maybe? (I know DFW is super competitive right now. )Put down ~$300k, use the remainder to make updates, raise rents. Then refi in 1-2 years, pulling out your equity and maybe a little cash to boot. This is basically big-boy BRRRR.

It's also worth your time to take a hard look at those 8 doors. What's your monthly total cash flow? What's your ROE? What kind of appreciation are you seeing? This could be a good time to consider selling and using a 1031 exchange to get into a larger property without tapping into as much of your available cash.