Hello everyone, I am new to the bigger pocket website. Thank you for reading this. I will freely admit I only know a little bit about real estate investing. My goal is to keep accumulating rentals in good neighborhoods in my local area. My 2 rentals are single family homes. Ultimately, I would like to be in the situation to cash out and buy a higher end multi unit apartment. As of recent, my market has been fairly pricey because of the high demand and low supply. I have a question about what I should do next. Here is a little rundown
Rental 1 2-1 bath
Purchase price: 72,000.00 approximate value now 155,000.00
Down Payment: 14,000.00 (20%)
Interest Rate: 4.25% 30y/ fixed
Current balance: 52,500.00
Current Tax: 2,300.00/year
Insurance: 511.00/year
Flood Insurance 750.00/year
Utilities: 40.00/month all other utilities paid by renter
Current Mortgage w/escrow: 542.00/month 6,504.00/year
Rental Income: 1,200.00/month 14,400.00/year
Profit 814.00/month 9,768.00/year
Notes: This house requires Flood insurance. It is extremely unlikely to flood. In 2012, a once in a lifetime flood occurred that did not affect the house. Also the house has a crawl space so the likelihood of a catastrophic flooding event is very implausible.
Rental 2 2-1 bath
Purchase price: 130,000.00 approximate value now 170,000.00
Down Payment: 26,000.00 (20%)
Interest Rate: 4.1% 30y/fixed
Current balance: 99,600.00
Current Tax: 2,482.00/year
Insurance: 750.00/year
Utilities: garbage 40.00/month renter pays all other utilities
Current Mortgage w/escrow: 828.23/month 9,938.76/year
Rental Income: 1,225.00/month 14,700.00/year
Profit 356.77/month 4,281.24/year
For anyone willing to take the time to look at my situation I am looking for input on my next move. These are the options that I am looking into so far…
I can refinance rental 2, possibly lowering interest rate, taking the cash and paying off rental 1’s 50k remaining mortgage. The advantage would be being able to eliminate flood insurance and have a larger profit margin. I would estimate I could increase profit by a couple hundred dollars a month.
I am reading BRRR, so another option would be to refinance and take the cash for a down payment and try to find another rental. I do not think I would be able to pull enough equity out to purchase without financing and have enough for rehab.
I am sure there are other options and I would love to hear them. I am looking for input and advice from some people that know more about real estate investing than I do, which is everyone on this site.
Those are my ideas for my fastest increase in profit. I could also save and slowly build my saving for another 20% down payment. That could take a while especially with the recent rise in price of houses in the area.
Thank you for taking the time to look at this. I feel bad for posting and asking for help and advice with nothing to offer in return. Again, thank you in advance.
