Seeking Advice for Investment Financing Strategy

[Michael S Davis]

Hello fellow Bigger Pockets members,

I'm a real estate enthusiast with a modest portfolio. I'm at a pivotal juncture where your collective wisdom would be invaluable. I'm looking to transition to full-time investing and have a series of immediate and long-term goals, and looking for advice about the best possible financing strategies to achieve these goals.

Here's my current situation: My primary residence is located in an affluent Boston suburb, with a valuation around $850k and a mortgage of $160k. The monthly mortgage, inclusive of escrow and taxes, stands at approximately $2400. Additionally, there's an available home equity credit line of $220K after a $35K usage.

Beyond my residence, I hold two rental properties under an LLC. The first, also located in the same Boston suburb, is a long-term rental (LTR) valued at $800k, mortgage-free, generating a monthly rent of $4000 and an annual net cash flow of about $30k. The second property is a short-term rental (STR)/vacation home in Cape Cod, valued at $1.5M. It's also unencumbered by debt, purchased in foreclosure, and renovated to serve as a lucrative STR, yielding approximately $115k annually with a net cash flow of around $75k.

My immediate 18-month goals include undertaking essential long-term maintenance and capital improvements to the Cape property (~$75K), which should augment the STR income. Additionally, I'm planning on constructing an Accessory Dwelling Unit (ADU) on the same property for approximately $250K (+/- $50K). This ADU would not only facilitate my eventual permanent relocation to the Cape, but also offer additional rental income opportunities.

Parallel to these projects, I'm exploring avenues to assist my daughter in establishing a house hacking setup in either Florida or the NYC area, which would require a downpayment ranging from $200K to $300K.

Looking ahead, once these immediate goals are achieved, I plan to expand my portfolio using the BRRR strategy.

Given these details, my main question to the community is: What is the best financing strategy to realize my short-term and long-term investment ambitions given my portfolio?

An important constraint to consider is that drawing on the equity from my primary residence isn't a viable option for marital reasons:) Hence, any financing strategy would need to leverage the equity within my LLC properties.

Should I consider a cash-out refinance or a home equity line against the two-property LLC portfolio? Or approach each LLC property individually for refinancing or home equity? Or perhaps obtain distinct financing for each project, like a renovation loan for the maintenance tasks, an owner-occupied loan for the ADU, and an investment or primary home loan for my daughter's property?

I'm eager for your feedback, advice, and any creative financing strategies that could assist in achieving these objectives. Your experiences, insights, and innovative ideas would be greatly appreciated:)