Payoff or refinance?

[Adam Hurst]

I have 8 SFHs. I am at a crossroads in the journey. I’ve learned more in the last 3 months than I have in the whole 10 years. I own a house that is worth $130,000 and I only owe $8500.

My end goal for real estate is not to be a real estate mogul with 100s of units but rather to have a comfortable amount of passive income to get me out of my 55 hr/week job. I figure with 12-15 paid off properties I will be able spend more time with my family. If I can keep building my portfolio at that time, I will.

I know that I can refinance and cash out on this property for about $85k. With that I can buy 2-3 more properties.

My issue right now is my cash flow. I feel it is lower than what it should be. My properties need to generate more money to absorb costs and position myself to be more comfortable when things happen. If I pay off the loan I increase my cash flow by $600. Cash flow per property in my area is only $250-$350 per month so having them paid off is where the real money is. I also feel a little uneasy with the pandemic, election and real estate bubble.

I can always use the extra cash flow to up my reserves and then refinance in a few years when things are stable.

Or do I refinance and buy 3 properties to get closer to the # goal. I would think I could increase cash flow this way by about the same, but I would increase my chances of having more issues with more properties.

Any advice would be great!