Should I Sell My Cash Flow Positive Investment Property?

[Bryan Lloyd]

Hi All,

I own a condo (rental property) in Santa Monica I bought for $270k (currently owe $240k). My neighbor, whose unit mimic’s mine, sold recently for $490k. I am looking to take the next step in real estate investing and would love a bit of advice.

Big question I have: Should I sell my condo and 1031 into another property or properties to increase cash flow/ROI?

I am cash flow + about $150 per month. This takes ALL costs into consideration including repairs, vacancy % etc.

Things I think about:

-Seems as that So. Cal may be at the top of the market or close to it = great time to sell?

-I would love to own enough cash flow + investment properties to stop working in the short term.

-Since Cali is so expensive would it make sense to buy out of state, or even a turnkey situation with the amount of cash I would have to put in after the sale?

-What would be my best option to increase cash flow with this amount of cash?

Like I said, just dipping my toes in now, but looking to do a cannon ball.  I am sitting on a good situation either way, but some expert advice would really help.

Thanks much,

Bryan

[Thomas S.]

If your unit is worth $490,000 that means you have $250,000 in equity, With a conservative return of 5% your $250,000 is earning $1041.66 per month.

You think you are cash flowing $150/month but in reality you have negative cash flow of $891.66/month. This is a horrendously poor income property and you should sell it immediately.