10 minutes to read

Busy, Busy, Busy. And What Should I Do With My Real Estate Portfolio?

Happy May 1st everyone!

You may have noticed that I’ve been absent from the blog. I have plenty to say but I’ve been focusing my efforts else where. I’ve been burning to write a post titled, “How to Live a Champagne Lifestyle on a Water Budget” ever since I was accused of this by the person whose house I decided not to rent. But, that’s another post for another day. I mean, who other than me can write such a prolific post with hundreds of examples, such as how I shop at thrift stores and Ikea to save money? haha. Oh, well.

I have too much going on in the next two months, all which was amplified when I decided to become a real estate mogul. So, unfortunately I don’t have time to shine such a positive light on this negative person.

This weekend, I’m off to a friend’s “Big Fat Mexican Wedding” in New Haven, Connecticut. It’s going to be great. She’s been a Facebook friend for over three years and it’s going to be good to finally meet her during her special occasion. I’m also meeting up with one of my best friends and his wife whom I haven’t visited in quite some time.

Two weekends later, I’m going to visit my dad in Detroit, Michigan for his 74th birthday. Although I frequently call him on the telephone, it’s usually once a year around his birthday that I try to visit. Since I don’t visit my hometown too often, I’m going to try to visit as many of my friends, family, and mentors as possible. At a minimum, since my lovely woman is traveling with me, we’re going to drive around Detroit to see the good, the bad, and the ugly. I love acting like a tourist in my own home town. 🙂

In the next two weeks, I have to close on the investment home that I recently purchased at the county courthouse here in Charlotte.  And after closing, all repairs and upgrades need to be completed within one week so I can have the home listed to either sell or rent by June 1st.

In the next two months, I’m moving from my current home in Charlotte, NC to another home that I’m purchasing in Bartlett, TN, a suburb outside of Memphis. I still have to close on this home, which means that some time this month I have to fly to the attorney’s office in Tennessee. After which, if I want the home to be ready prior to my personal property arriving I’ll need to schedule painting, carpet, and hardwood installation, at a minimum. And then, I’ll be changing out the existing appliances for stainless steel.

In June, I’ll be spending two weeks in Costa Rica with my lovely lady.

I’m super excited about this! The first week I’ll be teaching English to different organizations in the city of San Jose, Costa Rica while she assists with child care. We’re going to be housed locally and be fully immersed with a native family. The second week will be spent relaxing, touring, and catching up on our future business plans. She wants to grow her blog, Young Finances, and I want to eventually sell more copies of The Wealth Number: The Financial Solution to Pursuing the Job You’d Love.

Finally, when I return from Costa Rica I’ll be spending a week in Orlando, Florida with my son and my lovely lady, if possible. I’ve been promising my son that we would check out the Harry Potter theme park since it opened about four years ago. It’ll give us time to catch up on how his summer is going since he spends it with his mother, as well as relax in the Florida weather at a nice resort.

Once those trips are over, it’ll be back to getting my home ready for live-in condition prior to returning to work sometime in mid-July.

So, there you have it. Lots of stuff going on and plenty of memories to be made. All the while, I have some business decisions to make with respect to my real estate portfolio.

What Should I Do With My Real Estate Portfolio?

Before I take off for my flight to Costa Rica I’ll have a real estate portfolio of four homes.

  • The one home in Georgia that used to be my primary residence and is still underwater (under by 30k) and that negatively cash flows about -$100 monthly.
  • My current home in Charlotte that has equity of about $50k.
  • The investment home here in Charlotte whose after repair value (ARV) will yield about $85k in equity, and
  • My future primary residence that will have an ARV that will yield an equity to about $20k.

All homes will have mortgages.

I’m trying to determine if I should rent out the two homes equity or sell them and walk away with $90k (after commissions) and use it to flip more houses.

If I keep all the homes for rent, I can pull the equity out ($135k) to buy properties that I can flip…again and again. Afterwards, I can repay the equity lines of credits and take the profits from the flips. Meanwhile, I’ll have renters paying off the mortgages and yielding me a net operating income of roughly $1,100 monthly.

If I strategically pay off the mortgages of both homes in Charlotte I’ll have the opportunity to yield an extra $24,000+ a year within the next five years. This seems like a no-brainer. Of course, the down-side is that I’ll have tenants as liabilities and an extra $1,100 monthly in mortgage payment expenses.

If I sell the homes, I can walk away from them and focus my real estate efforts locally in the Memphis area with no long-distant liabilities.

In any case, I can write about the pros and cons of this entire portfolio ad nauseam but I just shared the surface of the decision-making that is going on right now. There are many benefits to keeping the properties that I didn’t mention such as having a home at its current fixed price if I decide to return to Charlotte.

Comments

  1. I love how much LIFE comes through in your posts. You could be some green eyeshade fat butt sitting in a closet, but instead you are alive in every way and fully showing your loved ones and friends what it’s all about.

    • Thanks, Peter. Oftentimes I think of scaling back on some of the things that I write because I don’t want any one to think that I’m “putting on airs.”

      But then I remember ever so promptly how small my viewing audience really is. haha. So, I continue to be as transparent as possible.

      I truly wish I had the time to write more in order to fill in the blanks but I guess that’s how I use my personal Facebook page. 🙂

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