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Updated over 7 years ago,
Advice on next business move?
I currently own 4 properties. 2 single family houses and 2 duplexes. All of them cash flow positive. The first Property I ever bought was a little 2 bedroom property in a nice area. It is paid off and has never seen a vacant month in 4 years. The problem with it is the rent I am not sure if it is worth it to keep the money locked up in it. I get $750 a month in rent but after tax and insurance I probably only make about $625 a month. Is it worth it to keep 100k locked up in a property that only makes like 7500 a year? 7.5% return on my money doesn't get me excited and that's if the entire year goes by without having to spend a dime on repairs (doubtful). My problem is, since 2 of my properties are paid off and the one that we live in we Rent on short term rental and make about 25k a year on top of the mortgage, we have made our business our full time job. This is fine and dandy until we tell our mortgage broker that we are self employed...what a nightmare.
Should we look into a 1031 exchange on a commercial loan for our under performing property? We aren't able to do a cash out refi yet until we can show 2 years of Airbnb income on taxes (that will happen this coming September) should we just continue to save up money and pay off debt (our car loan) until we can qualify for a new loan and just continue to rent out the underperforming Property? What do you all think?