All Forum Posts by: Olivier Colson

If you put them on 10 year mortgages, I would venture to guess that the goal is to pay them off and own properties without the burden of debt. 

If you have more of an appetite for leverage, then I think you trade up into better quality, higher appreciation assets; however, life does not exist on a spreadsheet. If you don't want to take on a 20-30 year loan, then don't. Personal finance is as much dopamine, cortisol, and serotonin as it is ROI. Only you can determine what level of stress, leverage, and struggle is the right amount.

Also, don't sleep on stopping. The goal is a great life and control of your time, not the maximum door count. My wife and I reached financial independence with fewer properties than we expected and a backstop of after tax index funds. VTSAX doesn't have a furnace to replace, and it is nice to be completely liquid in a good portion of your investments.

Hi I’m new to Bigger Pockets. I love your post. I’m a smaller investor ( 4 properties- 2 long term, 1 short term, & personal home with lots of equity). 800+ credit score & good income. 

I’m trying to find out how to keep buying properties without continuously putting down 20% of my own money? How did you do it?

Yes, my properties have a lot of equity, but all my interest rates are between 2.8 - 4%. I can only get a HELOC on my personal home, investment property doesn't qualify.

@Olivier Colson, One of the best things you can do to leverage up will be to partner with your children.  Do 1031 exchanges into small multi family properties (4 units or less conventional financing).  Your child will apply for conventional primary residence financing.  Your guaranteeing the loan and providing the down payment from the 1031.

Do this where they'll be going to college.  These are called kiddie condos.  Your child gets a place to live and you get favorable rates.  The 1031 floats the down payment.  And the rents on the other units provide great cash flow.  And best of all that child of yours is getting a better education in real world managing the property than they are in class.

Partnering with your children can be an awesome!!! experience.

What will be your projected cashflow once you pay all of them off?

Hello Investor,

Congratulations on building a robust real estate portfolio in just three years! It's impressive, especially considering you manage everything yourself. Given your situation and goals, here are some strategies to help you take the next step and grow your portfolio further:

1. Refinance Existing Loans

- Lower Interest Rates: Since nine out of ten properties have commercial loans, consider refinancing to secure lower interest rates. This can free up cash flow and improve your overall financial position.

- Longer Terms: While you're hesitant about longer terms, refinancing some properties with 15-20 year loans at lower rates might reduce your monthly payments, allowing you to reinvest the savings.

2. Leverage Equity

- Home Equity Line of Credit (HELOC):** Use the equity in your properties to secure a HELOC. This can provide the funds needed for down payments on new properties.

- Cash-Out Refinancing: Another option is cash-out refinancing, which allows you to tap into your home equity to buy additional properties.

3. Partnerships and Joint Ventures

- Partner with Other Investors: Team up with experienced investors to pool resources and acquire larger properties or diversify into different real estate sectors.

- Real Estate Syndication: Participate in syndication deals where multiple investors fund larger projects, such as apartment complexes or commercial properties.

4. Expand Property Types

- Multifamily Properties: Consider investing in multifamily properties like duplexes, triplexes, or apartment buildings. They often offer better cash flow and economies of scale.

- Commercial Real Estate: Diversify into commercial properties, such as office buildings, retail spaces, or warehouses, which can provide higher returns and different tenant profiles.

5. Real Estate Investment Trusts (REITs)

- Diversification: Invest in REITs to gain exposure to a diversified portfolio of properties without the need for direct management. This can also provide liquidity and steady income.

6. Professional Management

- Hire a Property Manager: As your portfolio grows, consider hiring a property management company. This will free up your time, allowing you to focus on strategic growth and new investments.

- Automate Systems: Implement property management software to streamline tenant communication, rent collection, and maintenance requests.

7. Education and Networking

- Join Real Estate Investment Groups: Engage with local or online real estate investment groups to learn from experienced investors, share ideas, and discover new opportunities.

- Continuing Education: Take advanced real estate courses or attend seminars to stay updated on market trends, investment strategies, and legal changes.

8. Optimize Your Portfolio

- Sell Underperforming Properties: Evaluate your portfolio and consider selling properties with lower returns. Use the proceeds to reinvest in higher-yielding assets.

- 1031 Exchange: Utilize a 1031 exchange to defer capital gains taxes when selling properties, allowing you to reinvest the full amount into new investments.

9. Tax Strategies

- Tax Deductions: Ensure you're taking full advantage of tax deductions related to mortgage interest, property taxes, maintenance, and depreciation.

- Consult a Tax Professional: Work with a tax advisor to develop strategies that minimize your tax burden and maximize after-tax returns.

10. Plan for Economic Downturns

- Emergency Fund: Maintain a cash reserve to cover unexpected expenses and vacancies.

- Diversification: Diversify your investments to reduce risk, including different geographic locations and property types.

Your excellent credit score, lack of personal debt, and existing portfolio put you in a strong position to expand. By leveraging your equity, considering new investment types, and possibly bringing in partners or professional management, you can continue to grow your portfolio and achieve your financial independence goals.

Best of luck, and keep us updated on your progress!

Thank you

Hey there! It sounds like you're doing an amazing job so far, especially juggling this side hustle with a full-time job and managing 10 rental properties. That’s no small feat! Here are some strategies to help you expand your portfolio and step up your game:

- Look into Refinancing Your Existing Loans: With a mix of interest rates on your current loans, you might benefit from refinancing. Look for opportunities to lower your interest rates and extend terms slightly without going for 20+ years. This can free up cash flow for new investments.

- Leverage Your Equity: With 40% equity in your properties, you could consider a cash-out refinance. This allows you to take out a portion of your equity to use as a down payment on additional properties without selling any of your current assets.

- Partner with Other Investors: Bringing in partners can help you pool resources and reduce individual risk. This might mean sharing profits, but it can also enable you to scale faster.

- Consider Short-Term Rentals: Since you're in upstate NY, short-term vacation rentals could be lucrative, especially if you can manage them efficiently. These often generate higher income compared to long-term rentals, though they do come with increased management responsibilities.

- Improve Property Management Efficiency: Since you handle management yourself, consider investing in property management software or hiring a part-time assistant, even a VA. This can free up your time to focus on expanding your portfolio.

- Join Real Estate Investment Groups: Networking with other investors can provide valuable insights, potential partnerships, and even funding opportunities. Local real estate investment clubs or online forums can be great places to start.

- Scale Gradually: Instead of jumping into larger, riskier investments, consider scaling by adding a few more single-family homes each year. This gradual growth can help you manage risk and build experience.

Keep up the great work, and best of luck on your journey to professional real estate investing!