Next Move? Multi-Family live in value-add?

[Nicole Shoaf]

I currently own two properties - my primary home and a vacation home in Truckee we rent out on Airbnb.  Both homes have mortgages, about 37% Loan to value, at an exceptional rate of 2.625% (15 yr and 20 yr respectively, both refinanced in 2020).  I'm worried that this equity we are sitting on is not being put to its best use, and am wondering what someone in this situation would do?  A home equity loan seems like a possible way to expand my portfolio, would consider buying a multifamily and renting out our current home to live in one of the units and purchase it as a primary home (assuming its 4 units or less), but being in the Santa Cruz CA area, I am afraid I'll need to look outside of CA for any deal that makes sense, and can't afford to lose my great job (can't work remotely).  I'm afraid of the unknowns with out of state investing, and am afraid of overextending myself financially.  Thanks for any insights!

[Nicole Shoaf]

Quote from @Jake Andronico:

@Nicole Shoaf

Congrats!! Sounds like you guys are in a great spot. I lived in the Bay Area, went to school in Santa Barbara, and decided to live and invest in Reno, NV. 

If you have an awesome job and love living where you are, there is no shame in staying put! 

Depending on how risk adverse you are, going out of state can make sense, but I always recommend investing in your backyard (or at least being driving distance). 

If they're cash flowing super well, why sell or take out a HELOC?

If you pay cash for something and are able to refinance at a rate that makes sense to pay off your HELOC, that's the only thing I could see making some sense.

But, sometimes waiting and stacking cash for another opportunity is the best plan. 

Best of luck to you!!

 Thanks Jake! I also went to school in Santa Barbara (UCSB!) My twin sis is actually getting some proceeds from a home sale due to her recent divorce and is looking to invest in Reno, and I am considering investing in a property with her if we find the right multi-family in the right neighborhood for the right price.  The primary home isn't cash flowing (as we live in it), and would MAYBE break even if we were to rent it, but the Truckee home does cash flow a little.  And yes, maybe "be patient and save" is the best move right now, until a good deal comes along.