Leveraging existing properties

Hayden B. · 2024-01-26T19:00:43-08:00

Hello, I am in a relatively unique position and wondering the most appropriate steps/strategies to deploy. I have two properties, a condo in Boulder, CO that's free and clear and rented out to phenomenal tenants for the next two years. Appraised at 505k, the HOA fee is outrageous and I have a great property manager but she isn't cheap and I am cash flowing around $2000 a month. I also have a home in Las Vegas in a 55 and up community which is likewise rented out for two plus years and with very conservative cap ex and maintenance projections, it'll essentially break even. There's about 140k in equity in it and it has a 3.7% fixed mortgage rate. I am an attorney and the goal is to leave the law or just move to a career where I take a paycut but have more time to immerse myself in real estate. My question is considering the above, what strategies exist that would allow me to leverage the free and clear condo such that I am expanding my portfolio, or am I kind of stuck in a holding pattern of waiting until these existing leases expire, and then potentially selling the properties? I also have around 100k of capital I could deploy, whether it be in a syndicate or some other fashion. Cash flow positive properties I know are always the goal, but in the current lending climate and with the hours I work I need really hands on property management to be as passive as possible. Curious what strategies are out there and some suggestions on my next move, any advice is appreciative.

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

Delete your BP account.

Come back and post this same question. Add an @with my name so I know to respond. So I know it’s you.

Your money came to easy. Slow down and only invest $10,000 for your first investment. Work your way up and get your mistakes out of the way.

Passive and big returns very rarely go together.

Stop for a second and look at your background and experience. You want an unfair advantage. Then develop a scaling plan. Don’t go with investments all over and different types.

You might start with a type of investment to build up your cash.
.
Use that to then work on your scaling plan.
.
Use some of that Phi Beta Kappa stuff.

I’ll make some introductions to some people you want to start getting to know. Once you have your new BP account.

2 Reply

Steve K.

Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes

2y

Quote from @Henry Clark:

Delete your BP account.

Come back and post this same question. Add an @with my name so I know to respond. So I know it’s you.

Your money came to easy. Slow down and only invest $10,000 for your first investment. Work your way up and get your mistakes out of the way.

Passive and big returns very rarely go together.

Stop for a second and look at your background and experience. You want an unfair advantage. Then develop a scaling plan. Don’t go with investments all over and different types.

You might start with a type of investment to build up your cash.
.
Use that to then work on your scaling plan.
.
Use some of that Phi Beta Kappa stuff.

I’ll make some introductions to some people you want to start getting to know. Once you have your new BP account.

Lol

1 Reply

Steve K.

Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes

2y

Hayden have you looked into accessing the equity in your condo by refinancing or taking out a HELOC? I'm in Boulder, let me know if you need recommendations for good lenders to talk to about those options. I'd pull money out and use that for a down payment on another property personally. Rates are back down quite a bit compared to the end of last year. If you talk to the most successful investors in this area, their moto is "never sell". I definitely regret selling the ones I had to sell here, and am planning to hold the ones I have. Not sure about Vegas, I don't know that market well like I do Boulder. Happy to chat offline if you'd like!

1 Reply

Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

2y

OP, I'll bring our discussion back to the forum so other people can utilize.

1. If you're in a professional setting, don't broadcast your looking to move at some point thru REI on an open forum.

2. Basic leverage methods would be to Sale and pay taxes, Sale and do a 1031, or collateralize this asset to buy another asset. Each of these are both good and bad depending on your Scaling plans. You will get responses based on each person's perspective versus your own Risk/Reward scenario.

3. Currently your condo is making a poor to average return. You need to evaluate your $2,000 cash flow, if that is net of taxes and capex set aside. It could be a great asset if it is a great value growth property, plus the cash flow.

4. REI is about leverage. If you're wanting to scale you will want to leverage both properties so you're getting Growth/Income on more assets.

5. Me personally I would pick one market and sale the other properties, even if they are great properties. If I was still living in Texas or my brother was, would do: a. 50 properties at $10,000 each for potential return of $2mm gain., b. Do 2 properties for a $3mm gain., c. Do a personal residence for tax free. We would only do Low risk, High Reward properties. Have done a 1031 before. Prefer to pay the taxes, since our business model we can make the taxes back quickly and can scale quickly.

6. As I recommended in your situation, I would do small investments for the first 2 years and build your REI experiences up while you take the time to develop your Scaling model, which will actually answer your original question.

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Leveraging existing properties

Leveraging existing properties

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