9-5 is Draining My Life. Need Wisdom for Financing Next Step

[Jon Quijas]

Hey Team,

My wife and I are teachers/trainers and novices when it comes to real estate.

We own two properties (1 rental and 1 primary residence) in one of the hottest real estate markets in the Bay, San Jose. Wanting to invest, but have little cash. Open to advice and "What you would do" discussions", as we want to take the next step.  

Property One (condo rental) 2 bed/2bath: (Excellent buy)

We Owe: 215K (approx.) on it

Property Value: 480K (equity: 265K)

Tenants pay ALL of the expenses (Mortg, Tax, Ins. and Hoas) are $1604/month + tenant gives us $571/month (6852/year), as we charge 2175/rent.

Then....

We borrowed off it via a HELOC: We borrowed 30,000 to purchase another home (we owe about 28K on the HELOC)

Property Two Townhome/Condo (Primary that I would like to eventually rent out) 3 bed/1.5 bath: (not too shabby buy) - We got it for 442K, Owe about 410K on it, and it's worth about 530K. Not like the last deal, but not bad, being that we need a place to rent and we own for a little cheaper than what we would rent it for.

My wife and I would like to invest somewhere out of state, and buy and hold a 3rd property. What would you suggest to come up with financing? We have EXCELLENT CREDIT (I am in the high 700s and my wife is in the 800s). Creative Financing advice appreciated as I don't think a Conventional will work:

Review of our situation:

HELOC: 28K

Car Loan: 21K

Condo 1: Owe 215K, but Income of $571/month

Condo 2: Owe 410K

Income of Wife and I is about 100K/year

Visa: maybe 2K

Currently I have a 401K with $9k in it and my wife has a retirement account with $2k in it. We mad a mistake of paying down all of our debt, and we have very little cash on hand, but a whoooole lot of equity.

Looking to gain financial independence and get out of the 9 to 5 I am working that is burning me out and putting a damper on our quality of life. Would you sell property 1 and take the equity and reinvest in tax/landlord friendly states, would you try to hold on to it and buy a 3rd?  

Desperate in CA,

Jon