Rental property investment

[Brendan Connolly]

Greetings all. So just a quick synopsis of what we have going. We, well mostly myself, have owned a large 4 family house in a blue collar/working class neighborhood. We get decent people applying for rents and screen thoroughly to get the best that we can for the area. I've found that a mix of Section 8 [Housing Authority], disability assistance and as mentioned above working class folks. I manage the property and hire out when time does not allow me to care for the responsibility/issue/maintenance request, etc.  We are normally at 100 percent rental but I'm down one unit right now, lightly renovating the largest unit.  The tenants are typical tenants, good most days then horrible others.

I have 2 very young kids now and I'm interested in buying number 2 and possibly 3 in a better area but keep in mind that I have a full time municipal job and family that is at the forefront. Therefore I've considered hiring a management company to assist me or holding off on the investments. I have several questions/concerns. 1. What's the best option for financing a second project? 2. Should I go LLC? I never did on the first one and things have been fine in the 15 years I've had it.

3. What's the best play...paying off the first one or stretching the money and investing in the 2nd and 3rd? I'm a little lost and need some guidance. I need a mentor the more I consider my situation. Thanks for any advice. 

Brendan C.

[Brendan Connolly]

Yes, may I add that this property is in Bristol, CT (yes the home of ESPN original site).  Bristol is a busy medium sized bedroom community, which has it's share of pros and cons. Renters are abundant but they all seem to have similar financial issues/problems/road blocks.  

Does anyone like one specific screening website or methodology for weeding out good residents versus so-so ones? Listen, I've realized that with this business you have to make a lot of mistakes in order to know what to look for and what not to.  I've found that if you refer to the potentials as residents they feel entitled and prouder living in your property.  Just my crazy belief at least.  Sorry, got a little off topic.

I appreciate the info. Has anyone heard of bank stacking (I may be misusing the term)?  An older couple that owns 100 plus units has mentioned it to me but I can not recall the details. 

1. Ive looked into HELOC

2. Refinancing is an option, thanks Eric C.  

3.  I'm not familiar with 1031 Exchange will have to look into that.  

4.  I have several goals. One being that I want security in retirement and  steady flowing business when I retire from the municipal job. One that I can possibly hire some additional employees under (part timers mostly) Two, that I'd like to expand my portfolio and have more cashflow down the road, maybe enough to roll it into other investments or business ventures. I guess the skies the limit.

5. I also have a single family house that we've been in for  approx. 11 years. Not the biggest but enough to stay comfortable.  Thanks folks.