Is it worth to keep being a small time real estate investor? Two homes, 600k value, 300k equity, combined monthly cash flow only $1100.

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Forecast out the equity pay down, cash flows, and appreciation. Certainly seems to be an amazing investment for younger people. I have 6 rentals now. After they appreciate a decent amount I tend to do 1031 and sell one to buy two 😄

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^ as long as they fit in the “like kind” definition. So you can’t use proceeds to buy a personal residence

I’d probably sell those and restart with that cash flows around a 10% cap rate

Just can’t stop thinking of the bad things that could happen. Like a terrible tenant that needs eviction, or tenant that’s bad on maintenance, causing flood damage, mold, bad odors, or keep causing issues on plumbing, appliances or flooring, etc etc. Feels like a lot can happen to my thin cash flow. On the other side appreciation has been good so I don’t want to give them up, but really that’s not the point of RE investing

That is the point of it when you are younger and are highly leveraged. It’s a good way to avoid taxes and create monthly cash flow when your old and need a place to put your excess cash

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What’s the appreciation in home value?

I put in 80k, so now it’s 220k in addition. One was my first home, the other was bought right before the pandemic.

Do you have reserves? As long as you have reserves, this isn’t a terrible place to be in. Without reserves, I’d be nervous too.

If you have reserves and can buy another place that adds another $500 a month in cashflow through a refi or a HELOC, that helps you diversify. One of the trickiest problems with being small time is that any delinquency or vacancy hits the bottom line quickly. That risk is reduced when you have more cashflow sources.

Yeah liquidity is not a concern but I don’t have enough for another down payment for a 3rd home right now. It feels better seeing others acknowledge that this is a common concern for small investors. I get nervous thinking about refi, just naturally a bit alarmed thinking of the leverage I’m holding, but I’ll definitely explore that.

How are you calculating cash flow?

Are you including a maintenance budget, capex?

No including reserves. Just net amount after cash expense and tax

I'm small time too, but one of my 2 investment properties cash flow 3k. Time to find a better roi

Same as regular. Zillow, trulia, hotpads

Folks-where are you guys buying these properties. I am having such a hard time finding good deals

Mls. Pick ugly or hard properties first. Look for ones on the market over 3 months, then negotiate. Build in a buffer for repairs.

This is very common.

Do you have any existing leases? If so, when do they expire?

Are you open to a cashout refi for diversification?

If you could unlock equity, would you buy in the same market? Or a different market?

If you have good systems in place, expanding in an existing market may not be a bad idea. If you’ve just been winging in, then consolidating into larger deals with more diversification may be a better option.

How connected are you to other investors around you? Do you know others who are doing similar or bigger deals near you with better margins?

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