All Forum Posts by: Account Closed

@Ryan Thomas - My head is spinning :) - Thank you!

@Account Closed - Guessing a 1031 wouldn't be an option for us. The rules around that seem so strict.... I don't see how it's possible to find a place and close the deal in such a short time span. How would I calculate the 12yrs of depreciation? Thx again!

@Brandon Turner - @Account Closed - Thank you so much! Another investor proposed this to me: Sell the 4-plex, which would leave us with around 400k. + the 170k HELOC = 550K-ish downpayment on a building around 2mil - My investor friend said this could get us much better returns than the current plan.

What do you think?

My wife and I own a couple of properties in Los Angeles (1 single family, 1 4-plex). After many, many discussions, we've decided to use our resources and move forward in expanding our long term portfolio and purchase another multi-unit property. Our plan is as follows:

Property 1, single family home: Where we live now. Currently sitting on about 350K in equity. Just signed docs for a $170k line of credit at 4%.

Property 2, 4-plex: This building was purchased 12 years ago and has provided us with a very healthy stream of monthly cash flow. Sitting on about $400k in equity. Rate is now at 6%. We're currently trying to do a cash-out refinance at 5.125% (non-owner occupied). Hoping to get somewhere between $170-200k cash out. This would shave around $3-500 a month off our cash flow from this building.

We'll then use the cash out and part of the HELOC to purchase a new building. We've discussed more expensive buildings with less units in more desirable, rent-controlled areas.... and 5+ unit buildings in non-rent controlled, less desirable areas. Our agent, who is my wife's father is exploring several options for us. I personally like the idea of finding a multi-unit fixer and perhaps starting fresh with new tenants (our single family home was a major fixer and it worked out very well for us).

We will also use a portion of the HELOC for flipping to bring in extra cash flow.

We in the ballpark here?

My wife and I already have 2 properties (SFH and a 4-plex), but I really need to get a better handle on the numbers if I want to successfully expand our portfolio.

I've been in the creative field for 15 years, so I feel like I need to start from the very beginning to wrap my head around real estate formulas.

Can anyone recommend some good beginner courses or programs?

Thx!

Thanks all - This is fantastic.

Wife and I are in the beginning stages of going after a long term income property (In Los Angeles). We already have a 4 unit building here in LA - and a single family home we live in. Initially we were thinking 4-plex. But our agent, (who we trust very much) is asking us to simply consider a building with 5 or more units, saying that while riskier, and with more expensive and less secure loan options, they can pay off much greater down the line.

I've had many people tell me why we should stick to 4 units, mostly because of the fixed, cheaper loan. But I'm wondering what the specific pluses of owning 5+ unit properties are? There must be some advantage there... (greater cash flow?) My wife and I both like a little risk. So it is intriguing to us. Thanks in advance!

Colleen F. Roy N. David T. - This is great info, thanks again!!

Joel Owens - Thank you! Roy N. - This may be an odd question, but do you know if something like that would work here in the states?

My wife and I currently own a 4-unit rental property (4-plex) in Los Angeles and are now in the beginning stages of looking into purchasing a 2nd income property.

Our agent (who we trust very much) encouraged us to look into buildings with 5 or more units, saying the deal terms are better and they are relatively easier to acquire compared to 4 units and under, not to mention potentially bringing in more cash flow.

However, I've read some potentially negative things about acquiring 5 or more unit buildings... such as very expensive mortgages and interest rates that only fix for 7 years and force a re-fi down the line. I haven't had a chance to ask our agent about these factors yet.

Can anyone shed some light on this? Thanks!