Losing Money on Multi Family

[Rukhsana Shahid]

I’m looking for advice on whether to hold or sell a 3 flat-first property. Note: This isn’t my personal property but I have a personal interest in it. 

-Purchased an older 3-flat in 2019 at $250,000, with an FHA loan, owner occupied.

-The rehab costs exceeded the exceeded initial estimate and are around $60K-all personally funded.

-1 tenant has been behind in rent from almost day 1, so to pay the mortgage. had to use personal funds from job income. Recouped most but 6 months from rental assistance. 

-Not generating positive cash flow from the rental, paying rehab costs out of pocket-about 1500/month. 

-Considering selling the property and paying off the rehab costs, but I will likely end up with 0 profit after capital gains and commissions. 

-If the property is kept, continue to pay out of pocket, but it’s possible to get to $1000 extra from the rental in about 6 months to pay towards the rehab costs. 

-Is there any reason to hold on to this property?  Can access a Heloc right now (refinanced property), thinking of making another investment that will offset the monthly loss on this property. 

Thank you