3 Properties: 1) paid off 2) airbnb w/ mortgage 3) rehab

[Daniel Ross]

Hi - I am looking for some advice on how to best leverage the properties that I have in my portfolio. 

Here is the situation: 

1. 3k sq foot house on 1 acre - fully paid off / low-value estimate is 212k / needs prob 30-40k to make it super nice to AirBnb or probably around 15-20 to get it ready to rent. 

2. 1k sq foot house on 1 acre - mortgage remaining is around 80k and could easily sell as-is for 120-140 without it being an AirBnb which would bring more $ - currently, cash flows around 1500 a month 

3. 1600 sq foot house on 1 acre - This was my dad's house and he passed away Jan 1. My brother was feeling all nostalgic about living in the home he grew up in so he bought me out. Now he does not want to live there and wants to airbnb or rent it. I can buy back in by simply providing the $ the house needs to AirBnb or rent. Needs prob 30-40k to make it super nice to AirBnb or probably around 15-20 to get it ready to rent. Would have to restructure the mortgage that my brother got (I am assuming) but I feel confident I could cash flow this one at least 1500 a month as well. 

The reason I want to be strategic with what I already have is that ideally, I would like to use it for leverage for another property I am a partner on. 

It's an 11,000 sq foot commercial property that I do not own but my partner does. I am the developer on the project and if we add another floor or two we can place 8 cute and clean Airbnb apartments upstairs per floor or 4 luxury apartments per floor. This property is in one of the fastest-growing areas in the southeast. If not the fastest. And the commercial is still doing well downtown and the property is in the heart of downtown. I already have an operational partner to run a cafe + a speakeasy in 2/4 units. 

Now is not a good time for commercial but I feel 95% confident that we can rent monthly or book nightly all the units. And if we are the owners + the landlord for our own business we can ride the storm if it comes as we the residential should cover more than the mortgage and any rent/income from the commercial unit are just icing on top. 

The upfit on the property (estimated at 100sq foot to take into consideration bad things happening) is 2.2ml if we add two floors and take it to 22,000sq feet. I will need at least 20% of that in cash to get a mortgage so need to get to 440k to pull that off. Or is there another way with cash flowing properties as a collateral loan? 

My credit took a hit last year when Home Depot scratched the floors in my airbnb and I refused to pay them bc they blamed it on their delivery service (bad idea btw) and I am just now climbing back up after paying it off in full recently. 

Currently: I am at 649-673 depending on the reporting agency. I have a solid income to show from the day job + side hustle + airbnb income over the past 12 months 

My next step was to do the following: 

1. HELOC on property #1 - use that $ to fix property #1 and property #2 so they are cash flowing monthly - the high-end estimate is 80k

2. Designate 50k from the HELOC for upcoming tax sales - the idea is that I can spread this out over 5-10 properties and a year from now MAYBE has 1 or 2 + the % return from the owner who pays their tax bill.

That puts me at a 130k draw on the HELOC but turns that 130k into cash flow within 2-3 months depending on contractors.

Then I should have an additional 40k to have set aside to get a mortgage + have a little money to throw at 1-2 deals that come along that could be rentals or Airbnb. 

I want to move fast on all of this and I a brand new here so not sure if this is TMI (too much information) or not enough. Would welcome any conversations from anyone who has been there before or simply has some thoughts on how I can accomplish my goal. 

Glad to be here and a part of this community. Have followed along at a distance for a while and just pulled the trigger on pro today made the decision to move full steam ahead with this side hustle. 

Thanks in advance,

Daniel