cashing in my places to go big? local or out of state to reinvest

[Richard Forton]

I have been bouncing around this idea for a few weeks. I currently have a debt free duplex valued at $185,000 that does $2,000 a month and a 7 unit building that has a lean against the building for a personal business loan for about $160,000. This place brings in about $3,500 a month and is valued at $350,000. I am thinking about selling both of these and taking the estimated $450,000 and my personal money to purchase a large, 20+ unit, by putting 25% down. Been looking at the 1.7-2 million range. My only issue is I am north of Baltimore and the product around here is limited. And Baltimore city does not interest me at all!!!! Keep what I have? sell the debt free building to reinvest? sell both and go big? Also, go out of state? I just got back from Tampa and Houston nd saw many good properties. I know this is a good problem to have, I am just trying to make the next move to expand.

Thanks for any feedback!

[Chris Martin]

First, it seems obvious: Don't go into Baltimore (city). If you are in the $1.7M range, you could apply for a Fannie Mae small multifamily loan. Don't forget to account for capital gains taxes and depreciation recapture if you sell and you've had those properties for a while. At the end of the day... It all comes down to numbers. If you have a killer deal, you could bring in a capital partner to get you to 'pass' net worth or capital needs for an equity position. I'd try to keep your cash cows and maybe leverage them, or go with a partner to add a bigger parcel. At least that's one strategy.