too much equity in rentals??

[Mike Savage]

So i've been traveling a lot and thinking about significant equity in our properties while on the road.  Since the Portland market has been on fire and we've owned 4 properties for 10 plus years we have some very nice equity built up.  I feel good about the timing and the type of property we've bought but i'm wondering about things like opportunity cost and other real estate strategies based on our equity.  I'm ready to be comfortable with financial freedom and want to see if we could make some relatively simple steps to feel good about early retirement.  I would say my biggest roadblock is how expensive our RE market is.  My thought is if we were to sell a property or two and 1031 exch. we'd be buying into super high market in multi's for example.  Our total net worth seems pretty good but lots of that is tied up in the walls of our properties.  My goal is $10k month passive income from rentals to feel FI while leaving our retirement portfolio alone.  We are around $3k+ now on our 3 rentals.  A musician friend in LA bought into Realty Shares and likes that hands off freedom when he is in studio or on the road.   But I'm  very risk averse so not sure this would be  goo d fit

let's discuss and see if I'm missing the forest for the trees.  would love to hear some options from the community.  It certainly seems like we can squeeze more cash out of our good investment decisions.  

[Calvin Thomas]

Originally posted by @Joe Villeneuve:

IF you want to retire, multi's are too much work, and inconsistent cash flow.  All you need is to have to replace the parking lot, the roof, etc... in any given year, and your CF disappears.

Sell what you have, and use your equity to buy a NNN commercial. You didn't tell us the numbers ($$$ equity available), but if you are talking about $1.2M in equity, you can buy a NNN property with a 10 CAP and have $120k in NOI...cash flow.

Nothing wrong with multi-families.  Once you have 50+ units, it brings in a nice income each month.  You take that money and parlay some of it into the next one, then the next one, so on and so one.  Everyone needs a place to live.  Urban areas are a headache, but at 600+ units, it's part of the job for us.  That's what employees are for.  Or, if you do not want employees, or are not big enough yet, then you hire a PM.  

Buying into Realty Shares now is like buying at the top of the market in 2007, but you own nothing but shares.  Similar to a co-op.  If there is a downturn in a few years, your income from Realty Shares will drop significantly due people not paying rents, mortgages, etc.  If you own the property, you have some more flexibility.  

Personally, we have only a few with mortgages, the rest free and clear.  Though, we bought them years ago after the dust settled from the crash, there is some nice appreciation.  However, I hate mortgages, and only use them now for larger projects.  But that's me.  We have 3m -- 5m in unmortgaged real estate over several states.  Yea, I know, we can buy 15m+ more in properties and grow even faster.  I do not like going through all the ins and outs for mortgage approval.  I've leveraged enough in my time.  It's always best to have cash reserves, lines of credit and equity in other buildings in case we need to tap them.  

But hey, I'm an old man...  What do I know...