Buy and Hold Rental Income Strategy Finance and Growth Advice

[Lee Kozokas]

Hello Everyone! 

Thanks in advance for the read and/or advice. I have been trying to figure out the questions below both on my own through research and also by contacting some advising firms but haven't came to a conclusion yet, so I thought why not put my problem out on BiggerPockets to get a few different opinions. 

Essentially, I am seeking some direction on what I should do moving forward. My intent is to continue to grow my real estate investing portfolio. I started in 2011 with a single duplex, and have since grew the business to a total of 5 properties, 9 total units. These consist of 4 duplexes and 1 single family. The duplexes are located in PA, the single family is in MS, though, my focus for this post is on the PA properties, as I intent to expand in that market. I purchased the homes not in the best condition (purchase price ~$35K per house, 2 units, on average) and have done most of the remodeling myself to keep costs down. 

Debt wise, I currently have 1 mortgage (~$27K balance), 1 commercial loan (approx ~$42K balance), an unsecured loan ($13K balance), followed by some credit card debit totaling ~$15K. No worries with the interest rate on the cards and unsecure loan, the highest interest I pay across the board for all my debt is 4.65%.  

I am also an active duty Air Force member, so I have a property manager as I am outside the state. I would like to continue to grow my business, I am just not sure what the best option is. Should I continue to buy duplexes or should I try to get financing for an apartment building, or go commercial? Additionally, since I do not have much financing on these properties, I am having to claim significant gains on my taxes, which leads me to wonder about picking up an investment requiring larger financing (I'm also seeking a CPA). Which then leads into another problem, I currently operate these properties under my name. I have recently revisited the possibility of LLC formation and I am open to thoughts on that as well. In the past, my property and umbrella insurance has provided enough piece of mind for me, though if I am overlooking some other major benefit of the LLC verses the cons, I will reconsider.

I feel like I have a decent system in place, but after stepping back and forming the above questions, I realize I definitely have some past due work on my plate to maximize efficiency and continue growth. Any constructive criticism is appreciated! If any further info is needed, feel free to ask!

Thanks again!

- Lee