Buyout or keep equity?

[Ian Loonce]

I have a business partner, we have 8 homes together.  I have 2 more on my own.  We are about to do a big refinance and I included 2 of mine so we could meet the 500k threshold. 

I am thinking of trying to drop the 1 of mine from the loan...and selling the rest to my partner.

The buyout would be for 175k for the 9 properties.

On paper it looks like I would be making 28-33k a year off of the properties. However they are mostly low-end units in bad areas which could come with a lot of headaches and maintenance. 

If I sold for 175k, I could buy a couple decent single families with less headahces..refi those 2 and be making the same amount of money in no time..with half the work and half the headache.

What would you do?

The other option would just keep buying with my partner with more low end multi units. 

[Theresa Harris]

Quote from @Ian Loonce:

Quote from @Joe Villeneuve:

Quote from @Ian Loonce:

Quote from @Joe Villeneuve:

You do realize you asked and answered your own question,...right?  Let me help you.  If you sold the properties to your partner, you would still be keeping the equity...just moving it to a different property...or properties.  I bet the cumulative CF from the new properties would be more than the cumulative CF you're making no too...and, the total PV would be higher too.

 Well the deals are not as good now as they were 2 years ago when we started so I'm not really sure yet.  

Deals haven't changed.  The strategies and location of these deals have...but that's true at all times anyway.

It looks like I'm making about 35-40k a year if I stay with all 10 properties in the LLC.

If I Keep one and sell the other 9 equity.

I'll have 175k cash and about 4k a year off the one house.

But way less headache. I'm just wondering how easy I can get back to 35-40k a year.  

(Where I live the houses are very cheap) 

 Run the numbers buying houses in a better area.  The houses may be more expensive, but once you factor in less turnover, higher rents and fewer problems; the real numbers may be a lot better.

House prices may be higher, but so are rents in many areas and why you can get for your current rentals will also be higher.