What to do with a property that has too much equity?

[Josh R.]

Hi BP Peeps,

So I have run into a good problem. Long story short, my portfolio's equity has grown to the point where the return on equity is so low that it has forced me to consider selling my 14 unit apartment building. 4 years ago when I bought this property for 445k and I dumped in 200k and has performed incredibly well and rents have grown, the building is now worth around 1.1M. I owe 650k. As you can tell there is a large amount of money sitting there , to which has made my cash flow now negligible at best when considering ROE. To top it off my my 5 year balloon comes up next year and the interest rate almost doubles from where it was from 4.75 to 8%. I could sell my entire portfolio of 28 doors and pull the leverage lever OR I could sell this 14 unit and pay for something in all cash and do a lazy 1031 exchange, or do a regular 1031 which puts more pressure on the time frame. 

To the other people who have faced this issue with too much equity sitting around and the need to grow, what would you do with this? Sell, STR, partner on bigger deal, etc?

Thanks for the ideas!

Josh