Looking for investment strategies and opinions

[Brick Biermann]

Hello All,

Here's the situation, I have a 4 unit home, fully rented, all with 1 year leases, located in a great location of Jersey City. Also have a low interest mortgage (less than 3%), 43K annual NOI, potential equity of 600K and since owning it for almost 20yrs have never had any issues renting out any of the units [longest turnover was 2 weeks to find a new tenant].

With the exception of finding the tenants (I use an agent) I manage all maintenance aspects of the property but am coming to a point where I might want to move on and considering doing a 1031 exchange to of course avoid Cap Gains and invest in another property closer to my primary residence. I understand some of the possible implications of making this move would be a likely higher interest rate and lower NOI on the new investment but would like to get additional feedback on what other things I should take into consideration with this possible move from those out there who might have some experience in this realm. All thoughts are appreciated.

[Greg Kasmer]

@Brick Biermann - I would personally do some research on properties that you would be interested in locally first. If you have that much equity, perhaps a $1.5-$2M would make sense, but I assume that would be a larger property with more doors. Is that something you would want to manage yourself? I have not done a 1031 exchange, but my understanding is that often times people do that to "trade up" to a larger (or bigger) asset. I would think about what asset you would want to buy and whether a good number of those exist in your local area. Even further, I would underwrite 10-20 deals in your area to get a sense if they would indeed cash flow more than your existing property. Sounds like you have a very solid quad, so you'll want to make sure you can get equivalent (if not better) cash flow at an 8-plex, 12-plex, etc... Good Luck!