From NFL Sidelines to Aspiring Buy & Hold Investor!

[Devan W.]

Hello BP! I signed up for an account a few months ago and told myself I was going to listen to every single podcast before I made my introduction. I'm actually a little bummed out now that I don't have anymore podcasts to catch up on during my early morning workouts! 

A little background on me - I have my MBA and have worked in the NFL for about 5 years with both the Miami Dolphins and Denver Broncos as a Football Operations Assistant. My wife and I purchased our first primary home in Denver in 2009. After a few years, we decided to move our little kids closer to family in Western KS (in between Denver & Kansas City about 4 hours each way). We rented out our house in Denver so I have a few years of being a long-distance landlord under my belt. The house is on a 15yr fixed @ 3.75%. We have built up quite a bit of equity (thanks to appreciation & aggressively paying down our mortgage). But after reading books, forums, and listening to podcasts, I understand that making extra mortgage payments isn't exactly the best use of my money!

I feel like I should refinance now & use leverage to really grow & expand on buy & hold rentals. Deciding to pull the trigger on a refinance is hard when I have such a low rate and only 7 years left to payoff my mortgage! Also, my oldest kid will be going to college in 9 years so it would be nice to have that thing paid off.

The town I currently live in is not the best area to invest in - population is less than 2,000, property taxes are crazy high, and it's not exactly a growing economy. I would love to hear your advice & opinions on what I should do! Thanks for reading!!

[Devan W.]

@Caleb Heimsoth - Thanks for the reply! Zillow estimates the house is worth $446k and I would say that's pretty close considering what my neighboring houses are currently listed at. I owe about $89k on it.

I also should mention that I have a $75k HELOC on the property with a small balance (we used some of the money to upgrade our primary home).

It's been about 6 years since it was our primary residence, so I would definitely want to do a 1031 exchange if I sold. I think if I had a few deals lined up and knew exactly what I was putting my money into, it would make the decision a lot easier. I'm pretty new to all this stuff! 

My thinking right now is to test the waters and maybe use the $75k HELOC to purchase a smaller multifamily property somewhere. I feel like if built up my confidence in 1 or 2 deals, I would then feel comfortable enough to do the 1031 exchange.