Portfolio Advice (Need help)

[Nathan Frost]

Hi all, I need advice and help how to move forward.  I am willing to email my portfolio.  My numbers are kind of tight on cash flow due to a blanket loan (had to do to pay off lots of debt/rehab).  They rentals do okay its just that I have to property manage them due to a day job so that cuts out $830 in cash flow.  However, I want to see if it would be smart to refinance two properties to cash flow less on them in order to add 2 more to balance out the portfolio (cash flow extra $400-500).  That could be risky too but otherwise for 2-5 months out of the year I could be breaking even or in red.  Just my numbers are tight and trying to see how to move forward.  If there is 1 vacancy I am okay but when there is 2-3 it can put me in the red for that month.  Anyone willing to look at the portfolio and give advice.

[Diego A.]

Hi Nathan,

I would try to rephrase to make sure I understand better. You have two properties, which are in a blanket mortgage and you use a property management company to manage them. The numbers get tight as soon as you get some vacancy over the years.

Your idea is to grow your portfolio taking cash out of your 2 properties so that you can buy two more to balance and have  better cash flow.

This is how I would look at it:

- Properties are constantly in red, if a few vacancies are causing you to get in red you are not building your reserve fund.

- To expand your portfolio you have to think on doing self-property management, or refinancing to get more properties won't resolve the issue and add more problems. You have to be careful on taking this decision.

Problems to solve:

- Reduce vacancy.

- Improve in property management.

Then you can think on expanding your portfolio.

A good investor would need to have the hands on the ground to make sure that they understand what is going on.