Trading up? When is it a good time to let go

[Andrew Bermani-McCann]

I bought two duplexes right next to each other in the town I live in. I was able to get a deal on the properties and BRRR'd my way to my next deal. True cashflow is roughly 500 each property. PP for one was $110k rehab was $50k and ARV is $260k. The one next door PP is $165k rehab $5k ARV $265k. I planned on buying and holding but I have had another big deal pop up. PP $1.3mm ability to be fully rented as is but over the next 10 years will need roughly $200k in rehab ARV $1.7mm. This deal consists of 4 buildings totaling 17 units. true Cashflow right now is roughly $100 per door however there is tons of opportunity to decrease expenses over time.

My question is that I need more money to cover the down payment so I was considering a 1031 exchange into this new deal. I feel like the true cashflow from the property still makes it a solid deal to hold on to but I am not really sure at the best way to calculate the missed opportunity cost if I was to sell them now vs hold them long term. 

[Dave Foster]

@Andrew Bermani-McCann, return on equity comparison will probably be the closest way to estimate opportunity cost of holding vs selling.  Cash on cash doesn't represent tomorrow's return when rehabbing.  And guessing appreciation is tough.  Amortization will be consistent depending on when you bought those other two.