Should I sell? Talk me out of it

[Edd Sylvester]

I'm in the middle of tenant turnover, spending a good bit of money and time rehabbing my rental and debating if all this money, stress and time is worth it. Here is some background:

Property 1: I started into the world of rentals when my primary home I'd bought in 2013 ($250K) had increased by 60% by 2016. I took out a HELOC and was able to buy a bit of a beat up SF house that we rehabbed and started renting. It has had a good rental history and it's value has also gone up dramatically, over the last 7 years, ~87% (bought for $255K, current Zestimate ~$480K). I am grinding through tenant turnover currently, busting my tail on projects in the evenings and weekends and putting a bunch of money into it to get it rented again. The difference between the hoped-for rent and the mortgage payment will be ~$1300.

Property 2: In 2020 we sold the first primary and bought another house. Then crazy 2020-2021 happened and the value of this house increase 60% in 18 months. We did a cash-out refi to buy another SFH rental. Similar situation as the first rental. We had to put a lot of money into rehabbing it but now we have it in good shape with a tenant in place and rent minus mortgage is ~$400. It's all been a pretty wild ride.

My wife and I got into this rental thing is a sort of haphazard way. My parents had a rental unit on their property when I was growing up and it always stuck with me as a great way to build wealth, add sweat equity and eventually help pay for college tuitions and retirement with cash flow. So I talked my wife into the first one and she was on board, we had the equity to pull off the first rental with a HELOC. We are a single income house as she stays home with the kids, so our personal cash flow was relatively tight, but we figured it'd be a good long term play to shift the equity in our primary into a breakeven or small cash flowing property that could be bigger down the road. And then values exploded. Then the second explosion in 2021 gave us the equity to replicate what we did the first time.

Having the 2 rentals is great on paper but the last 2 springs, we've had to dump a lot of money into these rehabs, as well as a lot of time and stress. This whole operation has always been more my idea. My wife has increasingly thrown out the idea that we just sell one or both. Too much money, too much time and energy away, too many ignored projects at our own house. I know we'll get burned on taxes if we sell, my accountant is now looking at what that would look like. But at the same time, it feels like I'm spending too much money (we've now piled up a good bit of credit card debt and HELOC debt, as well as our own cash) and time on this. I've got young kids and both last spring when getting rental #2 up and running and currently working on turning over rental #1, I'm gone a lot working on things, running around, setting up meetings etc.

I'm sure if and when I get property 1 rented and it's back to the passive part of rental management, it'll all look and feel a lot better but I'm wondering if I might have gotten ahead of myself, stretching ourselves to acquire properties more than we should have. I'm looking for advice, thoughts, a pep talk, anything!

Thanks