Hello everyone,
After a few years of reading and learning from the community, this is my first post! I'm looking for advice and perspective on how to gradually scale my current holdings. My 10 year goal is to create 10k/month in cashflow, have enough equity to think about leaving my job (and stop contributing to a 401k) at 45, and focus on real estate (any my family) full time.
We live in a highly competitive market, North of Boston and over the past 3 years have purchased 3 properties at what I thought was the top of the market. So far, so good; and the market recently has showed signs of plateauing. I want to grow, but want to make sure to not over leverage and put my family at risk.
A few details:
35 years old, credit, income, and 401k good for the age; 100k in stock/cash; wife, and a brand new baby.
Market: Highly competitive north of Boston- Class A 3 unit, (2BR 1BA ea) properties in Class A/B neighborhoods go for 850k, Rents are 1800-2k per unit. 30 minutes more out, you're looking at 600-650k for the same building with 2BDR rents around 1650.
Strategy: Busy day job, we're looking for 3 unit properties where 2 of the 3 units are in good shape and 1 unit needs some VA/TLC (10-20k) and can add 200$ month over the current rent.
We own 3 properties:
3 unit, ( 3 2BR, 1 BA units) purchased in July 2019 for 657k. 3.75% conventional, 30 year fixed, 5% down. Current Value 800k. Current Loan Balance: 600k. Cashflow after expenses: 1000k/month Class A, Class B neighborhood. PMI is $350/month and i'd LOVE to get it off! Escrow payment has gone up 600$ in the last 2 years (taxes)
SFH, purchased in July 2020 for 580k, 3% conventional 30 year fixed, 10% down. Rehabbed kitchen and first floor. Current value 675k. Current Loan Balance: 510k, $50/month PMI
2 unit,(2b/1BA, 3BD/1BA) purchased in July 2021 for 530k.3% conventional 30 year fixed, 15% down. Current value 530k, Current Loan Balance 450k. Class B/Class B. Cashflow after expenses (-$350 month, family member lives rent free in the 1st floor unit but contributed most of the down payment) $40/month PMI.
How would I best leverage current equity in the assets/cash and stock with the goal of purchasing more rental property that generates 10k/month passive income? With a new baby, I'm looking for a safer route and am willing to look at a more conservative strategy.
Thank you!
Matt
