Financing options for my next group of properties

[Chris Collins]

Hello Bigger Pockets Community,

The advice I have read and received from this community has been instrumental in building my real estate portfolio.  I wanted to run a scenario past those in the community to see what general consensus is.

I currently have 7 residential rental properties (4 duplexes, 3 single family) and a 14,000 sq foot industrial building (owned with partners for our HVAC business).  One of my duplexes has enough equity to purchase another property.  I also have a personal residence with equity.

I could refinance my duplex, and pull out roughly $35,000 to invest elsewhere.  My cash flow on the property would go from $550.00 per month to around $390.  I would then take the $35,000 to purchase another duplex in the same area, cash flowing around $325-$350 per month.

I could also refinance my primary residence and pull out $100,000 in cash to invest in more properties similar to that mentioned above.

My goal is to build my passive income stream, however, I have a wife and a three year old son, so managing risk is also important to me.  Does it make financial sense to do two refinances to pull cash out and buy more properties?  Am I greatly increasing the financial risk to my family?

Thank you so much for your help and advice.

Chris

[Brandon Roof]

Hi @Chris Collins!

I'm sure you could get a number of responses that are going to differ based on everyone's risk appetite, but based upon what you are describing and your familial situation my suggestion would be to continue to leverage as much as you can within your current rental properties and make your primary residence and the industrial warehouse untouchable.  In an apocalyptic scenario where all is lost, your family remains protected with the roof over their head and you still have the space to continuing running your HVAC business.  Some would argue that you are leaving too much equity sitting there doing nothing, but I could argue that it is providing you and your family one heck of an insurance policy.