All Forum Posts by: Ian Russell

Got it thanks

 Carl

Thanks for the reply in referrencing to refinancing some of the paid off properties what would you suggest.  Lets say 4 of them are paid off and have about 500k equity in each one.  How much would you refinance and take out of each one?   You would then purchase more properties?   Thanks again

Quote from @Nathan Gesner:

Diminishing Return on Equity (ROE) Over Time in Real Estate Investment

The graph above shows how the Return on Equity (ROE) diminishes over time for a real estate investment. As property values increase (through appreciation) and the equity grows, the ROE declines unless cash flow increases proportionally. This illustrates the common problem of holding too much equity in real estate without actively leveraging or reinvesting it. Investors should regularly evaluate ROE and consider moving funds to a new investment when their return diminishes below 8%, which typically occurs by year 7.

You also mention that your properties require a lot of maintenance. I would consider selling off your older, lowest-performing properties and investing in something nice and new. You could sell a $500,000 property and use the funds to purchase two properties worth $750,000 with $250,000 down on each.

If you have the time and energy, consider diversifying into self-storage, multi-family, stocks, or other investments. I bought a self-storage facility that produces more cashflow than ten single-family homes for 1/5th the price. You have enough equity that you could purchase a large storage facility with employees and produce a much better return for decades to come without the headaches you experience with tenants and toilets.

 Great feedback- Iv'e always liked the self storage idea I will look into that.  I think selling a few and investing in some newer units is something I need to look into for sure.  Thanks again

 Ryan appreciate the feedback-  I'm definitely leaning towards selling a couple of them especially the olders ones.  I do like the idea of potentially pulling a line of credit and reinvesting.   What is a jv or syndication?  thanks again 

Maybe I need to just hire a financial planner but thought I should come here first.  Trying to figure out the best way to maximize my equity in my investment properties.  Some of them are getting on the older side but have good equity but I just seem to be making bigger repairs on some of them which wipes out the profit for the whole year. So I will list what I have and just seeking some advice because I fell I could be doing more.  All my properties are out of state so im paying property managers 8%. Thinking of selling a couple and investing profits in stock market or just putting in high yield savings at 4.5% or potentially buying new properties with less maintenance.  Cash our refi a potential option?  Dont know much about that.  Also Im 49 years old so not into huge risk anymore but dont mind a little.  Any thoughts? or do I just hire someone to help.   thanks

1. Duplex Paid off( Washington state) Paid off- roughly worth 500k. 38,4000 in yearly rents

2. Duplex Paid off(Washington state)- roughly worth 530,000k  40,800 in yearly rents

3  Triplex Paid off (Washington state) roughly worth 500k 43,2000 in yearly rents

4 Triplex Paid off (Washington state) roughly worth 500k 42,000 in yearly rents

5 4 plex paid off (Arkansas) roughly worth 330000 31,200 in yearly rents

6 single family paid off( Arkansas) roughly worth 200k  19,2000 in yearly rents

7 Duplex (Washington) owe 60,000  worth 450,000 mortgage (900 dollars per month)  (taxes insurance included) 38,400 in rents

8 Duplex (Washington) owe 80,000 worth 450,000  mortage (900 dollars per month tax insurance inclueded) 39,000 rents yearls

9 Duplex(Idaho) owe 80,000 worth 430,000 mortgage (900 dollars per month tax insurance included) rents  36,000 rents yearly

10 Single family(Nevada) 0we 280,000 worth 700,000k mortgage ( 2000k per month tax insurance included)  rents 37,000 rents yearly

I have a two questions with regards to a 1031 exchange

The first one is if I were to sell a property for 500,000 its paid off can I buy 3 new properties that cost 200 thousand each or does it need to be one property greater than 500,000?    Basically I am looking to sell a Property in Washington and buy 3 properties that are being built now in the South.

Other question is this.  If I were to sell a property in Washington state and buy a property in California can I do a 1031 exchange if I am going to move into the property in California?  Or do I need to do it strictly as an investment property?  Can I do it as an investment property first and move into it at a later date?     thanks

Ian

Hi I am looking for a new place to invest, I like multi family 2plex- 4 plex but would potentially do something bigger.   Currently have properties in Spokane,Wa, Caldwell, Id, Reno, NV, Little Rock, and Benton Arkansas.   The only place that seems logical at this point is Arkansas since the values have gone up so much in the other places.   Im looking for anywhere that I can get close to the 1% rule.   I am not as much interested in appreciation as I am cash flow.  Have 5-600k to spend and would like something to yield over 5000 a month.  Any ideas let me know thanks

Ian

Thank you both for the advice that helps alot

Ian

Just had a question about doing a 1031 exchange.  I am looking at selling a property and buying another property in a state that  I will most likely move to in a few years. I would rent out the property for a while and eventually move into it?  Am I able to do something like this or can you not make a 1031 a primary residence? 

thanks

Ian

I have a duplex that sits on a big lot and I spoke with the county today and they said that I can build a property with a maximum of 11 units.  This is an area that I dont have any knowledge in.  They told me my first step is to get it approved which I need to fill out an application and go to a meeting to get approved.   Would my first step be to contact a builder and get the exact costs on how much it would cost to build a duplex/4 plex or what ever I decide?  I know they need to have a plan when I go to the meeting so Im assuming I would have to hire a builder to draw up the plans.  Any advice would help.  I am sure its pretty complicated but seems like something I should do 

thanks

Ian