Buy or Hold?

[Peter Shah]

I’m working with my father on managing his RE portfolio.

We have one multi family property that is fully paid off and generates roughly $200k in NOI/Cash Flow.

My father is 60 years old.

We have been discussing options on how to move forward. A cash out refinance to buy more property would put a substantial dent in cash flow with current interest rates. Also would come with the stress of a loan, and debt servicing. Not to mention the upkeep of the new property, and its loan stress.

Would the best option be to just hold? $200k is no small sum of money.

To obtain $200k worth of cash flow at current interest rates would require around $7M worth of purchased real estate in the NY metro region if they all had loans at their nascent stage.

What would you do if you were in our position?

[Alecia Loveless]

@Peter Shah Depending on what you use the $200K for there may be ample options to save some of this money for a couple of years and then use those savings to fund your next deal. That’s what I’d suggest if at all possible. You can get into a good property in many locations for $50-100K as a down payment. So saving up over a few years would be entirely doable.