Newbie - Take the next step?

[Jeremy Pastore]

Hi all,

I'm relatively new to real estate investing and am looking for some advice.  I bought my first investment property in Brooklyn NY ~6 years ago.  It generates a profit each month (rent is 4500/mo, expenses including mortgage are around 3500-4000.

Currently the property is worth about double the outstanding mortgage balance.  Most of this equity is due to appreciation in property values over the period I have owned it.

I would like to take the next step in expanding this investment portfolio, but am unsure of how to do that.

So, my question for the more experienced investors out there is - what should I do next?  Should I hold the property and wait to save enough $ to buy another one (due to high property values in the area this may take several more years)?  Or should I try and use the equity in this property to help buy something else?

I don't know for sure, but I think it will be hard to find something in the Brooklyn/NYC area that would command rental income high enough to offset the interest on a HELOC (I'm estimating around ~1K/mo) in addition to the regular mortgage payments and expenses. It seems like mortgages have outpaced rents over the past 5+ years or so in this area.

I'd appreciate any advice from the community!

[Jeffrey Holst]

@Jeremy Pastore  I think that it might be hard to buy in Brooklyn but you might be able to buy something elsewhere.  Ultimately it comes down to what you are going to do with the money.  If you have a place to put it that generates a return greater than the cost of the money then it makes sense to pull out some equity however you do need to account for risk.  And there is something to be said about a low leverage portfolio.  

Another option might be to sell the property and 1031 into something bigger that gets a better overall return.  However before you do anything you should determine what type of property you want to buy and how likely finding that property is.  

Good luck