All Forum Posts by: Will Mejia

@Will Mejia

Congrats! How much cash flow is the property producing per month? And is it pretty easy to manage or no?

I would compare the return on your rental to your stock market portfolio. It could make sense to sell the property and invest it in stocks if you can get a better return there, but there is also some benefit to having a little diversification. With no mortgage on the property, you have significantly less risk in the event of a downturn.

That's awesome Will, congrats! It always feels good to have no debt, that's for sure. (Not that I've known what that feels like for a long time...)

Hey Will, congrats on paying off your property and your successful stock market investments! It sounds like you’re looking to put your equity to work without the hassle of traditional rentals, which is totally understandable.

If you're not interested in another property or dealing with tenants, here are a few ideas to consider:

1. Invest in REITs (Real Estate Investment Trusts): This would let you benefit from real estate market growth without the headaches of property management. REITs are typically easier to manage and can give you exposure to real estate without being directly involved.
2. Explore Commercial Properties: If you're intrigued by the idea of parking lots, you could explore other commercial properties or mixed-use spaces. They may offer less direct management and, depending on the location, could provide a solid return.
3. Peer-to-Peer Lending or Crowdfunding: You could look into real estate crowdfunding platforms that let you invest in real estate projects without owning property. This allows you to spread your investment risk and potentially earn passive income from real estate without dealing with property management.
4. Private Lending or Hard Money Loans: If you're open to lending your money, you could offer private loans or hard money loans to real estate investors. In return, you'd earn interest on your loan without the responsibility of property ownership.
5. Diversify in Other Asset Classes: Since you’ve had success with stocks, you might want to consider diversifying further into things like bonds, index funds, or even crypto, depending on your risk tolerance.

As for the parking lot idea, it could be worth researching the market demand in your area. ROI can vary, but some parking lots have great returns with minimal upkeep—just be sure to research zoning laws, demand, and operational costs before diving in.

Good luck with your decision, and feel free to reach out if you want to chat more about any of these options!

Assuming when you say "$3900/mo in rental income" you mean cash flow.

That means it will take you about 13 years of rental income to equal the $500k in equity you have now.  I know you don't want to deal with tenants and their problems, so why not either:
A - Buy a NNN property where you don't have those problems, but still have cash flow,...or

B - Take your $500k, and partner up with another investor where they deal with the tenants.

I have a tax specialist who's amazing. He's responsive, knows the ins and outs of the game, and specializes in business owners and investors. I can provide his contact info if you'd like.

 Well sure it could be a refrigerator or other improvements that maybe you were going to do anyway, but that's not the only option. For example, my county tax bills come out in October and they are due without penalty by February 28th. My city tax bills are due by 12/31, but if that day falls on a weekend then I get the next business day without penalty. I run a trial version of my tax returns in November to see (approximately) where I'm at for the year, and then I make decisions from there - do I want to pay for my insurance for all my properties by 12/31? Or do I want to postpone it to the following year? Some years I'll double up my property taxes in a single year if I need more deductions. One year we did a cost segregation study on a newly purchased more expensive property to accelerate depreciation for a tax deferment. ETC. But there's no good way to do any of this unless you know how much tax you expect to owe. 

 This is awesome, it sounds like you have a plan! I would highly recommend speaking with a financial advisor as they bring much value besides investment management. Let me know if you need a recommendation of one.

It might be a good idea to invest in a bond short-term ETF and get 3% on your money over the next 6-8 months, a financial advisor would be able to point you in the right direction. Also, keep in mind if you will owe a substantial amount you might need to worry about the penalties and interest depending on when you make the payment. They may be nominal or they may not.

for Zero Risk to capital, move cash to your brokerage and buy USFR, paying 5.4%, must pay federal tax but no state taxes, it holds short term US treasury floating rate notes, no FDIC needed as FED can print more money to pay you off

for Mild Risk to capital, buy BKN, BlackRock municipal bond fund with 20% leverage, pays 5.5% tax free, and if 10 year bond yield falls 2% over next year, likely with rate cuts coming, then this will appreciate by about 15%

for Mild to Moderate Risk to capital, buy EDV, Vanguard 30year zero coupon US treasuries, pays about 4%, taxable and if 30year bond yield falls 2% over next year, likely with rate cuts coming, then this will appreciate by about 60%

Don't put into stocks if you need the cash in <3 to 5 years due to stock volatility