All Forum Posts by: Andrew Perkins

 Jim,

Yes, I suppose it is.  But I am a project foreman for an electrical contractor.  I deal entirely with the installation of electrical systems on commercial projects.  So on a day to day basis, I am not involved in real estate at all.   

My current career is challenging and never boring. The pay is good, the company is great, and there are plenty of opportunities for growth. However, there’s just something that I can never shake off.

Every chance I get, I find myself talking about real estate, mortgage rates, and loan strategies. I find every excuse to analyze properties and build spreadsheets for rehabs and rentals. Every real estate transaction I’ve been involved in (we’ve bought and rehabbed a couple of long term rentals) has been so enjoyable and I always think that if I could spend every day immersed in all things real estate it would be my dream job.

That being said, I’ve spent almost a decade working hard to build my career as a leader in the construction industry. I keep waving my thoughts off and telling myself to stay the course. It almost feels irresponsible to explore something like becoming a real estate agent at the expense of something that I’ve dedicated so much time to.

I guess I’m wondering if my passion for all things real estate is enough reason to truly take steps towards a full time career in real estate?  What paths might I look into?

Any advice would be helpful!

 That’s a great point!  I only say 8 because if all properties can similarly match the current ones, they should cover all of our expenses once paid off.  If we can reach that number with fewer units, I would not feel compelled to reach that number!

 
My initial thought when posting was lowering my expenses is the same as adding income.  However, when time is factored into it, that one lowered expense doesn’t seem to make sense.  

 Sorry, I think I may have worded it strangely.  It’s only a difference of $200/ month.  

Keep the rentals - $600/month income

Sell the rentals and apply to equity to current mortgage - lowers mortgage by almost $800/month. 

I guess after seeing it that way, it really makes no sense… 

Hello!

Does it make sense to use the appreciation gained from our current rental properties to pay down our primary residence mortgage?  We currently cash flow about $600/month on 2 rental properties.  However, if we were to sell the 2 rentals and refinance our primary, we would either be saving $800/month or could pay our primary residence off in less than 10 years.  This would put me behind on our goal of 8 rental units, but would decrease our expenses and possibly allow us to grow faster with less liabilities.  Or does it make more sense to keep looking for additional rental properties every few years?  I'd really appreciate any thoughts on this!

Thanks!

I'm not sure I understand when you're suggesting to sell? We invested 25k originally, and currently have the opportunity to turn that into 60k to reinvest into something else if we sell and defer capital gains. Do you see any merit in selling to invest in something like a STR that could potentially yield more cash flow? The decrease in cash flow would only occur if we had to use it as a long term rental as a back up plan - but I keep telling myself that would only be for the short term as the area is much more desirable. Maybe foolishly?

I reached out to a couple lenders to try this and the appraisal came back at less than what I am looking for.  However, my realtor here is confident the property will sell for what I’m hoping will yield a down payment of about 60k towards a new property.  We only invested 25k originally.  

In my market, any of the properties that are in desirable areas are selling for amounts that don’t make sense for LTR.  For example, the home we are considering selling was bought for 95k and rents for $1025/mo.  Some of the ones we are looking at now are listed at 240k with a possible rent of $1600/mo - nowhere near a 1% rent to price ration.  In some areas, it’s still possible to get a rental close to the 1% rule, but they’re in less desirable areas. Not to mention the bidding wars in nicer areas is outrageous still.  

Hello,

I'd like to know your thoughts on 1031 exchanging a cash flowing property (purchased 3 years ago and over 1% rule) for a better property in a nicer area. The nicer area will certainly not cash flow as well with current prices, but should have greater long term appreciation. There is also the possibility of using it as a STR to generate some extra cash flow. I know it depends on your individual strategy and goals - and we are not in need of cash flow currently, but it feels so wrong to me to look at properties with a worse return. I feel sick when I run the numbers and see a decrease in cash flow and start to doubt why I am even doing it in the first place! Any advice would be much appreciated.