Real Estate Growth strategy - need advise

[Olivier Colson]

Hello fellow investors, you have lot of experience. I need your advise to go to the next step.

I am 42 years old, quite new to the real estate investing. It's a side hustle started aside of my employee job and I feel that this is my best plan to pay my 4 kids college starting in 2027 and secure my dream retirement in about 10 years. I have a decent salary, excellent credit score, no personal debt, no personal mortgage. So I started from scratch 3 years ago and purchased one by one 10 rental single family houses in the last 3 years, all in my 20 miles neighbouring environment upstate NY. Only turnkey properties which I rent for 1% to 1.5% of the purchase price. Average property value 150k. All under an LLC. Nine out of ten have a commercial loan which ranges from 3% for the first one to 8,75% for the last one, exclusively with 10 years fixed rates from a local bank. My current strategy is to maximise equity over cash. All houses are rented to long term tenants. I do all the management myself (tenant selection, chasing rents from time time, accounting, etc). Limited maintenance is required, which I ensure with local handymen or contractors. Total equity 40%. Debt to income around 30%.

I feel stuck at the maximum of what I can afford to borrow and I am afraid of taking 20+ years loans. What can I do next to increase my portfolio and become totally financially independent ? What are the most successful strategies to go from amateur investor to a real professional ? All options you can advise will be welcome!!!

Thank you !!!!

[Melissa Haworth]

Hey there! It sounds like you're doing an amazing job so far, especially juggling this side hustle with a full-time job and managing 10 rental properties. That’s no small feat! Here are some strategies to help you expand your portfolio and step up your game:

- Look into Refinancing Your Existing Loans: With a mix of interest rates on your current loans, you might benefit from refinancing. Look for opportunities to lower your interest rates and extend terms slightly without going for 20+ years. This can free up cash flow for new investments.

- Leverage Your Equity: With 40% equity in your properties, you could consider a cash-out refinance. This allows you to take out a portion of your equity to use as a down payment on additional properties without selling any of your current assets.

- Partner with Other Investors: Bringing in partners can help you pool resources and reduce individual risk. This might mean sharing profits, but it can also enable you to scale faster.

- Consider Short-Term Rentals: Since you're in upstate NY, short-term vacation rentals could be lucrative, especially if you can manage them efficiently. These often generate higher income compared to long-term rentals, though they do come with increased management responsibilities.

- Improve Property Management Efficiency: Since you handle management yourself, consider investing in property management software or hiring a part-time assistant, even a VA. This can free up your time to focus on expanding your portfolio.

- Join Real Estate Investment Groups: Networking with other investors can provide valuable insights, potential partnerships, and even funding opportunities. Local real estate investment clubs or online forums can be great places to start.

- Scale Gradually: Instead of jumping into larger, riskier investments, consider scaling by adding a few more single-family homes each year. This gradual growth can help you manage risk and build experience.

Keep up the great work, and best of luck on your journey to professional real estate investing!