I'm a Newbie Trying to Figure out The Next Step!

[Azita S.]

Hi Everyone,

I consider myself a newbie because the more I learn about REI, the more I realize that I need to learn more!

I currently own 2 grade B SFH rentals in the Phoniex AZ and my primary residence in Portland OR. All 3 have mortgages and equity due to significant appreciation over the last few years. I recently took out $100K HELOC on my primary residence for remodeling and also sold 4 grade D duplexes that I owned out right! The funds have been sitting in a CD while I do my research on my next step.

Option 1 - use the $$ from the sale to payoff the HELOC

Option 2 - use the $$ from the sale and leverage the equity in the other properties to buy more investment properties.

After being burnt and losing $$ on grade D duplexes in Milwaukee, WI and having great appreciation and return on grade B SFH in AZ, I have decided to stick with buy and hold grade B SFH in the $100-150K range.

I've been studying markets like Orlando, Cincinnati and Indy where you can still find turn key SFH for under $150K with rents ranging $1200-$1500. I can tolerate minor repairs like new flooring and a fresh coat of paint, but don't want the hassle of managing a rehab long distance which I have done once in the past successfully with the right team, but would rather stay away from!

My HELOC payment currently is $522 , so if I could buy $100K property with even 5% return, it would cover the HELOC payment. and if I cashed out the equity in other properties, the returns would cover the increase in the mortgage payment. Once I know the properties are stable and generating cash flow, refinance and purchase more.

I'm more interested in appreciation and depreciation write off than creating cash flow. I just need the return covering all the expenses. My ultimate goal is to do a 1031 exchange for a commercial building in Portland.

My biggest fear is having low return and not being able to make the payments on all the mortgages especially my primary residence!

I would love to hear what Pros would say about my plan.

All feedback, constructive criticism and advice is welcomed. I'm here to learn!