Early retirement w/ 4 rentals, 5k per month and 1.5mil in stocks

[John Laney]

Hello, I was bitten by the early retirement bug 15 years ago and plan on being there over the next 2-3 years at 43 years old. However, while I have lots of investments (Stock and realestate) I am bumping up into a bit of a cash flow problem with regard to how I manage my realestate.

Current Situation and Initial Plan: Through my small business, investment and pension income my day to day living expenses are taken care of. I will have approx 5-6k per month which will set me up very comfortably with out touching the principle of my 1.5mil stock investments.

Now, what to do with the four houses I have? My four houses are currently scattered across the country and valued at 1.3mil with 725k of debt against them. Considering the cost of selling them and taxes I anticipate 600k profit. My initial plan is to take this 600k buy a ~600k house and Christmas tree farm in the Oregon countryside and spend my time investing in my family, friends church, and community.

While this is a very conservative plan, I'm not sure it is the best plan since I take a big tax hit selling rentals to buy a primary house and take a leverage hit by no longer having any of my money leveraged.

A better leveraged option is to sell the rentals, take 120k as a down payment for my primary 600k home and the rest as a down payment for a multi family using a 1031 exchange.

You can now see the rub. While it is best to be leveraged with a mortgage, the bigger my mortgage, the bigger cash flow problem I have. Even If I break even on the multi family, I run into a ~3k per month cash flow problem for my primary mortgage.

Is there a third option that I am missing? I'm hoping not to touch the 1.5mil stock fund in order to use that for investing in my community.

Thanks much, John

PS. if you live in oregon, track me down in a few years for your free Christmas tree!