Cash out Refinance or Not

[Alecia Loveless]

I’ve got an 8 unit paid off. 4 units are renovated, 2 of the others were renovated recently but not to my standard within the past 4 years, one the tenant is a slob and the 8th has a family which is an orderly and very clean hoarding situation.

If appraised should come in around $800,000+. Gross rents are $85,000. Net should be about $50,000 once the heat finishes getting converted to tenants paying in another 3 weeks.

I’m currently cash poor and property rich. I’m wondering if I should cash out $250,000 once the heating is done which would leave a monthly mortgage of approximately $2000 and an annual cash flow of around $25,000.

My current area has a price point of about $400,000 so am thinking of going out of state where I might be able to buy 2 properties or more with leverage and increase the cash flow to $3000+ per month.

Should I

A: stay with the 1 building paid off in these uncertain times with the ability to cash out later

B: cash out and buy local

C: cash out and move to investing out of state building another team and maximizing leverage to increase cash flow and move closer to my goal of retiring from my W-2 in the next few years?

I’ve currently got 7 buildings with 25 doors but only $5000 cash flow with the local market which averages $200 per door

Thanks

[Brittany Minocchi]

Either B or C depending on your comfort level. You've got equity, use that to work for you. Not sure where you're located....lots of deals to be found where I am in Ohio and I invest here as well, primarily in multifamily properties in C (or lower) neighborhoods. Cash flow is great, appreciation could be better, maintenance depends on how well you screen your tenants and what sort of turnover you have.