Am I Limiting My Wealth?

[Fernando Guzman]

Thank you all for taking the time to read and provide any advice on my situation.

I’m currently facing a decision with my two properties and would appreciate your guidance. Here’s the breakdown:

- Property 1: This property has approximately $40,000 in equity but is cash flow negative by about $1,000 per month.

- Property 2: This property has around $100,000 in equity and is cash flowing positively at about +$200 per month. I know it's currently under-rented and believe I can increase the rent to generate around +$500 in cash flow.

My questions are as follows:

1. For Property 1: Should I sell this property and transfer the equity into another investment, or should I explore ways to lower the monthly payment and break even or slightly positive on cash flow?

2. For Property 2: Should I hold onto this property, increase the rent to improve cash flow, and potentially pull out some equity for another deal? Or would it make more sense to sell and reallocate that equity into a different property that might provide better returns?

I’ve received some conflicting advice:

- My tax advisor suggested keeping the negative cash flow from Property 1, as it helps offset my current job income, which is around $240,000 annually.

- My mentor recommended that I sell both properties and put the funds to work elsewhere, potentially in more lucrative opportunities.

I feel like holding onto the negative cashflow is limiting my growth potential, but I'm trying to weigh the options carefully. Any tips or advice from those of you who have navigated similar situations would be immensely appreciated!

Thank you all in advance for your help!