I am new to the forum, but have been impressed with the knowledge base represented. I have been a full-time teacher with real estate investments for over 20 years. I initially purchased real estate with a 10 year plan to buy 20 properties and pay down as much as possible on the mortgages, so that after 10 years I could sell half and pay-off the mortgages. I would then have enough cashflow to live on indefinitely. Unfortunately, during that time my state changed their property tax laws which caused my real estate taxes to triple. These were low end rentals and this caused them to become break even investments at best and negative cashflow if you had a mortgage. My husband and I were forced to sell at the same time most other similar investors were doing the same thing. Luckily, we figured it out sooner than most and were able to sell rather than lose them to foreclosure as most in our area did.
Next, we took our albeit reduced equity and invested via a tax deferred exchange into medium price rentals that better cashflow since their taxes were not as affected by the change. This was 2007 so you probably know what happened next. Houses that we purchased lost 30 percent of their value. I am not looking for a pity party though. The good news is that the rents have held constant or increased due to all the foreclosed homeowners needing a place to live.
At this point I have $1,650,000 of property ($215,000 of that is my personal residence) with $885,197 in mortgages and cannot seem to get more than about $18,000 in cashflow. The rest is paying mortgages and other expenses for the properties. The mortgages do not pay-off until 2023. I would like to quit teaching now. I need $35000 to support my family's lifestyle. (about $50,000 before taxes i guess) The only way I can figure out to do this is to take out bigger mortgages or sell some of the houses to support myself until my apartment complex mortgage (with $3725 monthly payment) is eliminated. If I quit my job, I am not sure whether I would be able to get loans as easily or at all. I am reluctant to rely on rentals since it seems the government keeps screwing me over, but if I sold everything I would only net about $365,000 after realtor commissions and capital gains taxes. What would you do in my shoes?
*I am eligible to begin receiving a teacher's pension of $1300 per month in 2021 if they remain solvent.