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Overleveraged Advice Please Help
Hi, I was hesitant about writing this but want anyone out there that can help. Please give me any tips or advice. I rather sleep peacefully at night. I could use the criticism and just want to not worry every month about vacancies, repairs, tenant not paying rent, etc.
I have a portfolio of about 12 rental properties. They all are rented but one. However, what stresses me out and makes it hard to sleep at night is the 8 properties that are under 1 blanket loan. Its a 7k payment that includes mortgage, taxes, and insurance. Though, what I have noticed, is with 1 vacancy and especially 2 I am in the red and usually have to use my nest egg to get by for 2-3 months. I did the blanket loan because I had too many repairs that piled up over the course of 2 years and so I refinance to pay all that debt off but now feel like my numbers are very tight. I have 12 properties but only cash flow $2000-2200 and that's saying they are all rented with minimal repairs. Which most of them have been fixed up by now to not have problems, but you know stuff will come up. My problem was every time I did a cash out refi or had 30-40k I would go buy another property to expand but never kept a nest egg. Right now I only have a nest egg of about 25k. When I think it should about around 60k.
Technically they cash flow $3000 if you take the $800 in property management off my monthly sheet. But that would be difficult for me to manage as I have a day job. I mean I could but I feel like that would be more headache than it is worth. Ideally I feel like I should be cash flowing 3000-4500 which is about 350 a property or so. I get upset at myself lately cause I have a really good credit score and am a numbers guy. Just I have friends that have 2-3 STRs or LTRS and they cash flow around $2000-5000 on just 3 STRs. I don't mind selling some but it stinks because with the refinance there is a sell off price with the new lender and that won't make me cash out much more likely break even. Please give me any advice so that I can make sure I am moving in the right direction before it could possibly be a massive problem in 6 months if there were to be 2 vacancies or non payment of tenants. Send me your email and I can send the portfolio.
1.Should I keep grinding it out and build some equity? Pray no vacancies or repairs.
2. Sell 4-5 properties (likely break even) and feel good about 5 strong properties that have minimal repairs?
3. Sell just 3 and buy a STR that could help the portfolio balance out with its cash flow?
4. Other option?
Coach Carson has an excellent video on self management this month on youtube. I'd recommend you watch it. He also talks about keeping your tenants happy so you have less vacancies and overall costs. (I'd just add to his video the idea of having a plumbing company set up so that your tenants can call that company directly if they have a plumbing emergency.)
Don't compare yourself to your friends. First of all, STR are very intense and are not passive at all. The grass isn't always greener on the other side. Second of all, I always doubt blanket statements about profit or revenue. Unless you see someone's bank account statement and accounting software, I would consider it no more than gossip. Many people accidentally leave out a bunch of their expenses when they are bragging. It sounds like you have a handle on the accounting side enough to be nervous. Your friends might not fully grasp their financial situation at all.
Stash that entire $2k cash flow into your business savings until you have enough in reserve in your business to cover vacancies. In 6 months you'll have 12k set aside for this worse case scenario you are worried about.
- Rock Star Extraordinaire
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Without knowing what kind of portfolio you have it's difficult to give any good advice.
It sounds like you need either higher rents or lower costs. Aside from ditching the property manager, and evaluating your rents to be sure they are set at market rates, you can either build larger reserves (say from your day job) or pay down notes on the properties not in the portfolio loan.
If you have $2k cash flow every month, and a job that pays all your bills, you should be socking all that money away into reserves until you are comfortable with your reserve levels.
#5 Multi-Family and Apartment Investing Contributor
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#5 Multi-Family and Apartment Investing Contributor
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I don't like selling properties unless it creates an opportunity for something a lot better. It takes effort and money to turn a property into a money maker and that can get lost when you sell to say nothing of taxes etc. Use them as an asset to borrow against instead and if you can.
Don't leverage to the point where you can be forced to sell in a temporary or longer downturn. That is how investors get ruined, happens in all walks of REI investing.
Quit talking to and comparing yourself to your friends. Count your own money and forget about theirs.
We always want more, bigger, longer etc.
Congrats on what you have achieved! All the best!
Quote from @Bjorn Ahlblad:
I don't like selling properties unless it creates an opportunity for something a lot better. It takes effort and money to turn a property into a money maker and that can get lost when you sell to say nothing of taxes etc. Use them as an asset to borrow against instead and if you can.
Don't leverage to the point where you can be forced to sell in a temporary or longer downturn. That is how investors get ruined, happens in all walks of REI investing.
Quit talking to and comparing yourself to your friends. Count your own money and forget about theirs.
We always want more, bigger, longer etc.
Congrats on what you have achieved! All the best!
I agree with all this. Would it best to try and ride it out and see how it goes? Or sell a few? Or expand to offset low cash flow?
Quote from @JD Martin:
Without knowing what kind of portfolio you have it's difficult to give any good advice.
It sounds like you need either higher rents or lower costs. Aside from ditching the property manager, and evaluating your rents to be sure they are set at market rates, you can either build larger reserves (say from your day job) or pay down notes on the properties not in the portfolio loan.
If you have $2k cash flow every month, and a job that pays all your bills, you should be socking all that money away into reserves until you are comfortable with your reserve levels.
Agree. Probably won't ditch the property manager due to day job. Just wonder if holding reserves is smart or to buy 1-2 more to offset the low cash flow. Tempted to sell 2-3 to be good not sure.
#3 Managing Your Property Contributor
Sit down and figure out how much each one actually costs you and if you have any large expenses coming up (eg new roof). don't worry about what others are doing (you may not know the full story anyhow).
Stop buying new properties. Decide how long it will take you to save up your reserves to where you are comfortable. Would you be further ahead if you sold the vacant unit (ie get money quickly)?
STR may make more money, but they are a lot more work and require more management.
Quote from @Theresa Harris:
Sit down and figure out how much each one actually costs you and if you have any large expenses coming up (eg new roof). don't worry about what others are doing (you may not know the full story anyhow).
Stop buying new properties. Decide how long it will take you to save up your reserves to where you are comfortable. Would you be further ahead if you sold the vacant unit (ie get money quickly)?
STR may make more money, but they are a lot more work and require more management.
To be fair. I could sell one that rents low and the flip one and have 30-40k in reserves. I think that is a solid starting place. That would give me 40-45k in reserves which I think could last a long time since 90% is rented out. Thoughts?
#4 Personal Finance Contributor
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#4 Personal Finance Contributor
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Quote from @Nathan Frost:
Quote from @Theresa Harris:
Sit down and figure out how much each one actually costs you and if you have any large expenses coming up (eg new roof). don't worry about what others are doing (you may not know the full story anyhow).
Stop buying new properties. Decide how long it will take you to save up your reserves to where you are comfortable. Would you be further ahead if you sold the vacant unit (ie get money quickly)?
STR may make more money, but they are a lot more work and require more management.
To be fair. I could sell one that rents low and the flip one and have 30-40k in reserves. I think that is a solid starting place. That would give me 40-45k in reserves which I think could last a long time since 90% is rented out. Thoughts?
I vote no here. It sounds like you are stressed, but you don't need to be. You are letting outside inputs (friends rentals and income levels) cause you to overreact. You have $25k in reserves and you make $2k/month in cash flow. Don't make anymore moves. Rest, let the dust settle, and put the cash flow into savings. The appreciation and loan pay down you will gain from keeping the properties is likely financially better for you than selling some, paying taxes, just to have a little larger nest egg.
I say all of this assuming your W2 covers your personal life expenditures and you are saving some money there as well.
#3 Buying & Selling Real Estate Contributor
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#3 Buying & Selling Real Estate Contributor
- Attorney
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@Nathan Frost Could you provide more insight into the portfolio. Specifically are these properties in a low barrier market without any realistic rental income or property appreciation expected in the coming years? Is this a market where there is a reasonable thesis appreciation is expected in the near term? Is this a portfolio in an already established market with existing barriers that needs enhanced management/ rent increases as units turnover? If these properties fall under the first category listed above and the only equity your are building up is principal paydown, you are likely best served exiting, recouping your equity and learn from the experience. Otherwise, how will the portfolio's performance improve? If there's appreciation events around the corner or an opportunity to increase the rents in an established market where the portfolio will be difficult to replicate, find a way to hang in there. Perhaps there's even a way to bring on an equity partner where you give up some interest and in return have a properly capitalized operation, better quality of life and still enjoy upside in the future.... just a thought.
As a side note, I would advise you not to buy a STR or any property for that matter solely because you believe the cash flow will help the portfolio. From a cash flow standpoint, each property has to operate on its own. Can an acquisition help an existing portfolio? Sure. Examples: buying the run down property in close proximity to yours, filling a vacant commercial space with a neighborhood amenity near residential units you own...these are just examples. Cash flow from a new acquisition might give you more operating cash, but it doesn't enhance the existing portfolio. If the STR is a strong investment, by all means purchase it, but there's no such thing as balancing a portfolio. Either the property is a good investment or is not. Having one property that cash flows better doesn't change the fact other properties within the portfolio perform poorly.
#3 Managing Your Property Contributor
Quote from @Nathan Frost:
Quote from @Theresa Harris:
Sit down and figure out how much each one actually costs you and if you have any large expenses coming up (eg new roof). don't worry about what others are doing (you may not know the full story anyhow).
Stop buying new properties. Decide how long it will take you to save up your reserves to where you are comfortable. Would you be further ahead if you sold the vacant unit (ie get money quickly)?
STR may make more money, but they are a lot more work and require more management.
To be fair. I could sell one that rents low and the flip one and have 30-40k in reserves. I think that is a solid starting place. That would give me 40-45k in reserves which I think could last a long time since 90% is rented out. Thoughts?
It depends on your comfort level. If you are truly stressed out because you 'only' have $25K in the bank, then sell one. Remember to factor in what you will need to pay in taxes (ie capital gains) and fees. How long would it take you to save that same amount from your W2 and profit from the rentals? also look at how much your expenses have been for the last couple of years to get an idea of 'normal' costs.
If you sell, do it because you want to, not because you aren't making as much money as your friends claim they are making on their STR (you're comparing apples and oranges).
Quote from @Denis Ponder:
Quote from @Nathan Frost:
Quote from @Theresa Harris:
Sit down and figure out how much each one actually costs you and if you have any large expenses coming up (eg new roof). don't worry about what others are doing (you may not know the full story anyhow).
Stop buying new properties. Decide how long it will take you to save up your reserves to where you are comfortable. Would you be further ahead if you sold the vacant unit (ie get money quickly)?
STR may make more money, but they are a lot more work and require more management.
To be fair. I could sell one that rents low and the flip one and have 30-40k in reserves. I think that is a solid starting place. That would give me 40-45k in reserves which I think could last a long time since 90% is rented out. Thoughts?
I vote no here. It sounds like you are stressed, but you don't need to be. You are letting outside inputs (friends rentals and income levels) cause you to overreact. You have $25k in reserves and you make $2k/month in cash flow. Don't make anymore moves. Rest, let the dust settle, and put the cash flow into savings. The appreciation and loan pay down you will gain from keeping the properties is likely financially better for you than selling some, paying taxes, just to have a little larger nest egg.
I say all of this assuming your W2 covers your personal life expenditures and you are saving some money there as well.
Only thing I am considering is getting an All In One Heloc loan on my primary since I have 65k in equity in it.
Quote from @Stuart Udis:
@Nathan Frost Could you provide more insight into the portfolio. Specifically are these properties in a low barrier market without any realistic rental income or property appreciation expected in the coming years? Is this a market where there is a reasonable thesis where appreciation is expected in the near term? Is this a portfolio in an already established market with existing barriers that needs enhanced management/ rent increases as units turnover? If these properties fall under the first category listed above and the only equity your are building up is principal paydown, you are likely best served exiting, recouping your equity and learn from the experience. Otherwise, how will the portfolio's performance improve? If there's appreciation events around the corner or an opportunity to increase the rents in an established market where the portfolio will be difficult to replicate, find a way to hang in there. Perhaps there's even a way to bring on an equity partner where you give up some interest and in return have a properly capitalized operation, better quality of life and still enjoy upside in the future.... just a thought.
As a side note, I would advise you not to buy a STR or any property for that matter solely because you believe the cash flow will help the portfolio. From a cash flow standpoint, each property has to operate on its own. Can an acquisition help an existing portfolio? Sure. Examples: buying the run down property in close proximity to yours, filling a vacant commercial space with a neighborhood amenity near residential units you own...these are just examples. Cash flow from a new acquisition might give you more operating cash, but it doesn't enhance the existing portfolio. If the STR is a strong investment, by all means purchase it, but there's no such thing as balancing a portfolio. Either the property is a good investment or is not. Having one property that cash flows better doesn't change the fact other properties within the portfolio perform poorly.
I'll say this. Since I refinanced most of the appreciation was taken out with the cash out refinance. They likely now will only appreciate a very little. As for rents, they should rent out pretty easily in this market since most of the rents are 900-1200. Nothing sits too long. Usually most 2-3 months about it.
I figure with a 7k payment (includes taxes and insurance) I should have 42k in reserves which equals 6 months. Right now at 25k so 17k off.
#3 Buying & Selling Real Estate Contributor
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#3 Buying & Selling Real Estate Contributor
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@Nathan Frost I am interpreting this as these are homes in a market that may have previously experienced some appreciation but no substantial appreciation events are expected in the foreseeable future. Also based on the rents you quoted, this is a lower income/lower barrier market. If that's the case, and you are already achieving market rents while struggling to generate comfortable cash flow, you should move on. Many on here will disagree with me, but owning scattered site single family portfolios is an effective investment strategy is there is a a significant appreciation event that occurs. If the homes are in stagnant lower income markets and you are waiting on principal paydown, there are far better investment strategies where your capital should be deployed. Most who buy single family homes fail to even realize the true business they are in and make the mistake of continuing to chase the cash flow not realizing how inefficient of an asset class this is to operate, particularly in the lower income markets.
Quote from @Stuart Udis:
@Nathan Frost I am interpreting this as these are homes in a market that may have previously experienced some appreciation but no substantial appreciation events are expected in the foreseeable future. Also based on the rents you quoted, this is a lower income/lower barrier market. If that's the case, and you are already achieving market rents while struggling to generate comfortable cash flow, you should move on. Many on here will disagree with me, but owning scattered site single family portfolios is an effective investment strategy is there is a a significant appreciation event that occurs. If the homes are in stagnant lower income markets and you are waiting on principal paydown, there are far better investment strategies where your capital should be deployed. Most who buy single family homes fail to even realize the true business they are in and make the mistake of continuing to chase the cash flow not realizing how inefficient of an asset class this is to operate, particularly in the lower income markets.
Makes sense. They are average to lower income areas. What do you suggest? I am with you on this. I feel grinding it can work but I will need 20-50k to cover some of the expenses that happen each year.
#2 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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#2 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Thanks for sharing and sorry this is stressing you out. As others have said, I can't tell how much variation there is within your portfolio. Is every single one identical in terms of repairs and capex, and they all net exactly $200 a month? That can't be the case. Only you can decide what is right for you but it does sound like you should at least consider selling the worst performer.
#3 Buying & Selling Real Estate Contributor
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#3 Buying & Selling Real Estate Contributor
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@Nathan FrostLet me pose this question to you: What is the upside to continuing to "grind" as you describe it? From what I've gathered the properties will not begin to cash flow significantly better, you are in a market that cannot easily absorb unexpected capital expenditures (greater risk to you in the future) and the principal paydown is pretty meaningless for a while. If you agree with this, aren't you better off selling, recapitalizing yourself and focusing on better opportunities armed with the relationships and knowledge you now possess? I sense you have an emotional attachment to this portfolio because it likely took time and effort to assemble and this keeps you holding on.
Quote from @Stuart Udis:
@Nathan FrostLet me pose this question to you: What is the upside to continuing to "grind" as you describe it? From what I've gathered the properties will not begin to cash flow significantly better, you are in a market that cannot easily absorb unexpected capital expenditures (greater risk to you in the future) and the principal paydown is pretty meaningless for a while. If you agree with this, aren't you better off selling, recapitalizing yourself and focusing on better opportunities armed with the relationships and knowledge you now possess? I sense you have an emotional attachment to this portfolio because it likely took time and effort to assemble and this keeps you holding on.
Yes, my first ever LTR is in the portfolio that I personally rehabbed myself. But honestly I am over the personal attachment now that I am older and wiser. I rather sleep comfortable at night than worry about the next 7k payment / vacancy. I definitely am smarter now and have way better knowledge. And yes, you are correct. These properties will pretty much rent at the same price for the next 5-10 years unless I updated a few of the bathrooms and AC units. I might break even but I think it is smart to sell 3-4 of them and move on. The last 2-3 I have acquired in my portfolio are my best cash flowing properties because I have learned over the years how to calculate a deal better than I did when I started with these.
Quote from @Nicholas L.:
Thanks for sharing and sorry this is stressing you out. As others have said, I can't tell how much variation there is within your portfolio. Is every single one identical in terms of repairs and capex, and they all net exactly $200 a month? That can't be the case. Only you can decide what is right for you but it does sound like you should at least consider selling the worst performer.
Here is the issue below. Curious on which I should sell or keep till release price goes down. Or best action steps.
1206 Bishop $82k / Release Price $79,8001710 Collins $89k / Release Price $78,9601215 Bishop $89k / Release Price $79,8001217 Bishop $99k / Release Price $131, 8802409 Pennsylvania $99k / Release Price $100,800604 E 1 st. $85k / Payoff $45,000
#1 Market Trends & Data Contributor
Quote from @Nathan Frost:
Quote from @Bjorn Ahlblad:
I don't like selling properties unless it creates an opportunity for something a lot better. It takes effort and money to turn a property into a money maker and that can get lost when you sell to say nothing of taxes etc. Use them as an asset to borrow against instead and if you can.
Don't leverage to the point where you can be forced to sell in a temporary or longer downturn. That is how investors get ruined, happens in all walks of REI investing.
Quit talking to and comparing yourself to your friends. Count your own money and forget about theirs.
We always want more, bigger, longer etc.
Congrats on what you have achieved! All the best!
I agree with all this. Would it best to try and ride it out and see how it goes? Or sell a few? Or expand to offset low cash flow?
Create structured business calculation in term of DSRC and calculate the market asset valuation vs your equity and do what if strategy.
What happen if you sell the most performing asset and what happen if you sell the baddie ..usually the worst performing would stabilize your portfolio.
Quote from @Carlos Ptriawan:
Quote from @Nathan Frost:
Quote from @Bjorn Ahlblad:
I don't like selling properties unless it creates an opportunity for something a lot better. It takes effort and money to turn a property into a money maker and that can get lost when you sell to say nothing of taxes etc. Use them as an asset to borrow against instead and if you can.
Don't leverage to the point where you can be forced to sell in a temporary or longer downturn. That is how investors get ruined, happens in all walks of REI investing.
Quit talking to and comparing yourself to your friends. Count your own money and forget about theirs.
We always want more, bigger, longer etc.
Congrats on what you have achieved! All the best!
I agree with all this. Would it best to try and ride it out and see how it goes? Or sell a few? Or expand to offset low cash flow?
Create structured business calculation in term of DSRC and calculate the market asset valuation vs your equity and do what if strategy.
What happen if you sell the most performing asset and what happen if you sell the baddie ..usually the worst performing would stabilize your portfolio.
I'll say this. My worst one could net me 20-25k. And that could give me a nest egg for 6-7 months as if none were rented out. So that could be my first move and then just go from there.
#1 Market Trends & Data Contributor
Quote from @Nathan Frost:
Quote from @Carlos Ptriawan:
Quote from @Nathan Frost:
Quote from @Bjorn Ahlblad:
I don't like selling properties unless it creates an opportunity for something a lot better. It takes effort and money to turn a property into a money maker and that can get lost when you sell to say nothing of taxes etc. Use them as an asset to borrow against instead and if you can.
Don't leverage to the point where you can be forced to sell in a temporary or longer downturn. That is how investors get ruined, happens in all walks of REI investing.
Quit talking to and comparing yourself to your friends. Count your own money and forget about theirs.
We always want more, bigger, longer etc.
Congrats on what you have achieved! All the best!
I agree with all this. Would it best to try and ride it out and see how it goes? Or sell a few? Or expand to offset low cash flow?
Create structured business calculation in term of DSRC and calculate the market asset valuation vs your equity and do what if strategy.
What happen if you sell the most performing asset and what happen if you sell the baddie ..usually the worst performing would stabilize your portfolio.
I'll say this. My worst one could net me 20-25k. And that could give me a nest egg for 6-7 months as if none were rented out. So that could be my first move and then just go from there.
Then sell …
Over leveraging is dangerous path for REI
Quote from @Carlos Ptriawan:
Quote from @Nathan Frost:
Quote from @Carlos Ptriawan:
Quote from @Nathan Frost:
Quote from @Bjorn Ahlblad:
I don't like selling properties unless it creates an opportunity for something a lot better. It takes effort and money to turn a property into a money maker and that can get lost when you sell to say nothing of taxes etc. Use them as an asset to borrow against instead and if you can.
Don't leverage to the point where you can be forced to sell in a temporary or longer downturn. That is how investors get ruined, happens in all walks of REI investing.
Quit talking to and comparing yourself to your friends. Count your own money and forget about theirs.
We always want more, bigger, longer etc.
Congrats on what you have achieved! All the best!
I agree with all this. Would it best to try and ride it out and see how it goes? Or sell a few? Or expand to offset low cash flow?
Create structured business calculation in term of DSRC and calculate the market asset valuation vs your equity and do what if strategy.
What happen if you sell the most performing asset and what happen if you sell the baddie ..usually the worst performing would stabilize your portfolio.
I'll say this. My worst one could net me 20-25k. And that could give me a nest egg for 6-7 months as if none were rented out. So that could be my first move and then just go from there.
Then sell …
Over leveraging is dangerous path for REI
I am selling but agree. I refinanced to pay off a big chunk of debt/repairs. Now I cash flow but thats with all them rented. If 2 vacant I am out of pocket on my end. I am not sure the rule of thumb but I think you need 8k in reserves per property? So for 10 I'd need 80k? I'd be at 40k.
#1 Market Trends & Data Contributor
Quote from @Nathan Frost:
Quote from @Carlos Ptriawan:
Quote from @Nathan Frost:
Quote from @Carlos Ptriawan:
Quote from @Nathan Frost:
Quote from @Bjorn Ahlblad:
I don't like selling properties unless it creates an opportunity for something a lot better. It takes effort and money to turn a property into a money maker and that can get lost when you sell to say nothing of taxes etc. Use them as an asset to borrow against instead and if you can.
Don't leverage to the point where you can be forced to sell in a temporary or longer downturn. That is how investors get ruined, happens in all walks of REI investing.
Quit talking to and comparing yourself to your friends. Count your own money and forget about theirs.
We always want more, bigger, longer etc.
Congrats on what you have achieved! All the best!
I agree with all this. Would it best to try and ride it out and see how it goes? Or sell a few? Or expand to offset low cash flow?
Create structured business calculation in term of DSRC and calculate the market asset valuation vs your equity and do what if strategy.
What happen if you sell the most performing asset and what happen if you sell the baddie ..usually the worst performing would stabilize your portfolio.
I'll say this. My worst one could net me 20-25k. And that could give me a nest egg for 6-7 months as if none were rented out. So that could be my first move and then just go from there.
Then sell …
Over leveraging is dangerous path for REI
I am selling but agree. I refinanced to pay off a big chunk of debt/repairs. Now I cash flow but thats with all them rented. If 2 vacant I am out of pocket on my end. I am not sure the rule of thumb but I think you need 8k in reserves per property? So for 10 I'd need 80k? I'd be at 40k.
For me I am making sure all properties has DSCR above 0.9 and total portfolio is 1.4 dscr.
My reserve is 50% of gross valuation of all portfolio.
How to do this is to over leverage from the asset that I had from 10 years ago when money is cheap and refi with sub 3 percent rate, that money I reinvested to portfolio of dividend stock/etf that generates 15-30 percent cash flows.
#4 Personal Finance Contributor
- New to Real Estate
- Yuma, AZ
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#4 Personal Finance Contributor
- New to Real Estate
- Yuma, AZ
Quote from @Nathan Frost:
Quote from @Denis Ponder:
Quote from @Nathan Frost:
Quote from @Theresa Harris:
Sit down and figure out how much each one actually costs you and if you have any large expenses coming up (eg new roof). don't worry about what others are doing (you may not know the full story anyhow).
Stop buying new properties. Decide how long it will take you to save up your reserves to where you are comfortable. Would you be further ahead if you sold the vacant unit (ie get money quickly)?
STR may make more money, but they are a lot more work and require more management.
To be fair. I could sell one that rents low and the flip one and have 30-40k in reserves. I think that is a solid starting place. That would give me 40-45k in reserves which I think could last a long time since 90% is rented out. Thoughts?
I vote no here. It sounds like you are stressed, but you don't need to be. You are letting outside inputs (friends rentals and income levels) cause you to overreact. You have $25k in reserves and you make $2k/month in cash flow. Don't make anymore moves. Rest, let the dust settle, and put the cash flow into savings. The appreciation and loan pay down you will gain from keeping the properties is likely financially better for you than selling some, paying taxes, just to have a little larger nest egg.
I say all of this assuming your W2 covers your personal life expenditures and you are saving some money there as well.
Only thing I am considering is getting an All In One Heloc loan on my primary since I have 65k in equity in it.
Correct, you will still be $14k to the positive. That's a win. I think knowing you have the HELOC should be comforting enough. I wouldn't put it in place unless you get to the point where you need it. Maybe get with the bank and see how long it would take to get a HELOC just so you know the lead time. I still vote to let it simmer.
Edit: I just read through the rest of the responses. I can't argue with any of them. Personal preference. Good luck!