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Question

I am wondering how best to expand my real estate investments.  I currently have 5 MF properties with 14 units.  I am currently working on cash out refis for 2 of my properties.  With that and a HELOC on my primary residence I should have about $200k to invest within the next month or two.  For those of you who have already expanded past this point, if you could go back to when you had just a few units what would you do if you had $200k to invest?  For some background, I live in Salt Lake City and my current rental properties are in Ogden, UT.  I have started looking in Southeast Idaho (Pocatello, Blackfoot, Idaho Falls and Rexburg) but haven't found anything yet.  I'm open to investing in syndications but don't know if that is better than investing in individual properties at this point.  I would like to get into larger apartment properties or commercial properties.  I'm also interested in self-storage and mobile home parks.  My goal is to build up my portfolio and cash flow to the point where I can quit my day job and focus entirely on real estate within the next 5 years.

Don Spafford · Answer

@Ryan Bergevin You have to do what feels right for you. There are many possibilities. You could use it for a down payment on a 12-20 unit complex somewhere and double your doors. You could use it to start doing some BRRRR investing so that your money never runs out and if you do that for 5 years you would have plenty of properties with equity and hopefully enough cash flow to live your dream. Alternatively, if you did a Syndication you could learn from the general partners the process and then be a GP on another one and share in the profits and maybe then even 1031 into a large complex of your own. Each possibility can lead to others, and each bring their own set of problems to deal with as well. So it's up to you to decide what you will do. I am in a similar situation as you. I am starting the process to do some BRRRRs and also working with some people to invest in large complex deals.

Jordan Moorhead · Answer

@Ryan Bergevin yes I've gone and am on the hunt for one in TX now!

Ryan Bergevin · Answer

@Don Spafford I see you're in Idaho Falls, which is a market I'm interested in. I will PM you at some point.

AJ Shepard · Answer

@Ryan Bergevin,

It seems like you are on the right track.  Helocs are a great tool to leverage your home and get into more real estate.  There are options for Non Owner Occupied Helocs as well (I know bank of the west has done these), but performing refinances are certainly better terms and more secure.  Leveraging up is like leveling up.

Which direction to head...  You have certainly made some progress on the path that you are on and continuing to grow that portfolio is a good move.  One key piece of information that is lacking from the question is that when you quit your job are you planning on retiring or planning on moving into real estate full time?  If you are retiring, I would suggest a more passive approach and invest with other peoples deals, less to manage and great if you want to do other things.  If you are looking to get into real estate full time, I would suggest finding investment partners and use some of your own money in each deal and bring in more partners to do more units (ie use 50k of your own money and buy 4 units 4x and find investors to work with you).  You have a great track record so far and can show that you know what you are doing.  You will find that this will create a job for you in the real estate realm if that's what you are looking to do.

Thanks,

Jordan Moorhead · Answer

@Ryan Bergevin go to the Mobile Home Park Bootcamp with @Frank Rolfe. Worth 5x what they charge!

Brenden Mitchum · Answer

Hey @Ryan Bergevin

I would highly recommend going the mobile home park route for a variety of reasons that you might already be aware of. They are proving through the pandemic to be the true winner in stable cash flow investing. Plus, by getting involved in fixing up mobile home parks, rather than tearing them down, you will be helping to maintain what little affordable housing our nation has left. Being able to help others while also building wealth is huge for me - it doesn't get much better than that.

I'm always happy to chat with fellow investors about MHPs so if you have other questions or just want to know more, please feel free to shoot me a message anytime!

Tristan Young · Answer

Hey @Ryan Bergevin, I am an agent in the Salt Lake/Ogden area and I think if your strategy is working then definitely continue. Property values are skyrocketing here as I'm sure you've seen. I've also seen small business storefronts selling for ~300k in some areas of SLC. Feel free to message me if you need more specific data on any one area and I can do more research for you. There is also potential for smaller cities in the state like Price if your main goal is cash flow rather than crazy equity.

Ryan Bergevin · Answer

@AJ Shepard I appreciate the advice. I'm 45 and I'm not ready to put the rocking chair on the porch just yet. I'm enjoying my career in commercial lending but I've never been a fan of the 9 to 5. I think I would enjoy being able to focus full time on real estate.

Ryan Bergevin · Answer

@Jordan Moorhead I'll check it out. I assume you've gone through it? Have you purchased a property?

Ryan Bergevin · Answer

@Brenden Mitchum. I would definitely like to hear your thoughts on MHP. I will reach out shortly

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