How to Optimize Current Portfolio

[Justin Yun]

Hi,

i have a duplex property in south LA.

purchased it for 275k now worth about 750k and I owe 525k in loan due to cashout refi that I used it for a downpayment for my other investment property.

Due to this cashout I'm negative cashflow. My rent is 3k a month and my payment is 4k a month. Before cash refi, my payment was only $1990

should I sell this property or increase value by adding Adu?

problems.

1. Two units are occupied, will need to pay them to move out. If I sell as is, value will be a lot less than 750k.

2. ADU takes too long and expensive. May cost me 150k-180k to build 450 sqft 1bed and can only charge about 1400 a month on rent

3. I can only get funds from my Heloc with 9.72% rate. No other cash saved for me to spend.

4. I'm trying to sell my condo in Virginia put on the market around June, can get equity about 50-70k after selling.

5. Two rental properties in LA each about 1.2 mil value with no equity and negative cashflow. Both of these properties are purchased with 100% loan.

[Jake Baker]

@Justin Yun

Building an ADU would take a long time. Is there any way you can increase the rent? I would not keep this at negative cash flow unless I truly believed in the appreciation of the area.

I tend to look at my portfolio as a whole: 

What percentage of leverage do I have?

What is my Return on Equity?

What is my reserves amount that I need in case of unexpected capital expenditures?