Hi. Seeking advice on where/how to grow my portfolio

[Eric S.]

Hello,

I'm 34 years old and have been investing in rental property for about 10 years. I started when i was in college and enjoyed it enough to continue buying them on the side. I'll try not to drag this on too long, but I'm looking for suggestions or advice on what to do as I move forward. I got married 6 years ago and we are ready to have children. We both work full time and run the rentals in the evenings, so I know when the kids come along something is going to have to give! I handle stress very well, but even now without children there are days in the summer during move out/move in rushes that I start to feel overwhelmed. I would like to continue to grow my business and have recently hired a maintenance man to help take the work load off of me, but I'm torn over where to expand from here. Here is a summary of my portfolio and our income:

Our combined income (excluding rentals): $140k+ (both have great benefits which makes it tough to quit either job)

401k & Roth Savings: Approx $395k

HSA Account: $44k

Savings (personal): $80k (we are not big spenders so this amount increases rather quickly. If I'm not eyeing a rental I'll usually pay down some of the higher interest loans.

Our portfolio is more heavily weighted towards lower income units. These require more work but give me a much better cash flow. It consists of:

54 total units:

-4 multi unit apt buildings (mix of low income and student housing)

-7 duplexes

-9 SFH (all Class B and A properties)

Monthly gross rents: Approx. $27,000

After all expenses we cash flow around $100,000 per year. That number could be higher, but we have started spending money on updating some units, hiring maintenance, etc... the reason our savings don't reflect this extra income is because most of that goes into buying more rentals or paying down loans...also that income is somewhat new. I also have roughly $140k in our LLC account that is being held for a possible upcoming purchase. Most of my big aquisitions have came in the past 3 years. Before that I probably averaged $30k per year cash flow.

The total value of the rentals is roughly $2.75 million. I owe roughly $1.8 million. About 1/3 of the loans are 30 yr fixed at roughly 4.5%. The rest are 5/1ARM over 20 years at 5.25%. Our bank has been good about letting us reset that 5 year lock every few years to keep our rate lower. 

I feel like for my income and starting with basically nothing out of college and no backers, that I've done really well. However I look at my savings and feel like I could be doing better. I made some costly mistakes over the years and have put in a ton of hours and sweat equity but have learned so much. I've also reached a point where I fee like I can no longer work full time, manage the properties, buy rehabs and fix them up, and raise a family. 

I've looked into management companies locally and I worry they won't do as good of a job as I do on finding the right tenants, but maybe I worry too much. Also, I hate the idea of paying them $35-$40 an hour for service calls when I can hire someone for $15 full time. I'm afraid it will eat into all of my cash flow very quickly. But in order to bring on my own manager I don't feel like I own near enough property. I would also have to look over them quite a bit and if they ever quit it would put me back in a bind. The only logical solution I see at this point is to hire a property manager as I start getting a few paid off. 

For growth I've just started to look into other markets, but that really scares me not being nearby to keep an eye on things. Our local market is getting overpriced. I've looked at these turn-key companies and while they look enticing it seems almost too good to be true. 

I guess I'm looking for advice on what people do when they reach this point? My job offers a great retirement package and I started during college, so in 16 years I can retire, so I hate to quit. My goal is to have most of them paid off about the time I'm elegible for retirement. That would give me income until 59 1/2 when I could draw on my 401k When you reached this point did you turn things over to someone, buy turn keys, invest in REITs, or go into something completely different?

Sorry for the long winded introduction. I wanted to try to give as much info as I could. And I'm sure I left out some pertinent information, so feel free to ask. Thanks for taking the time to offer advice!