Time to sell at top of the market

[Benjamin Richards]

I have been convinced for about a year that we're nearing the top of the market, and I've thought about selling some of my properties. On Saturday my manager told me that one of my tenants is leaving, and it is my least favorite property in a neighborhood I wouldn't buy now, so I told him to list it.

Once I got over the psychological barrier of selling a house, I'm wishing I could sell two others, but we just got tenants in those two in August and early September. The two of them cash flow about $600/month combined and I probably have less than $30k into both of them. However, I bought them at the bottom of the market in 2010-2011 and probably have close to $100k in equity I could take out.

I guess now that they're rented I have to wait a year to list them? What are the other options? So far, I've thought of:

Offering them money to leave? I don't like this because it doesn't seem professional.

Offering to sell to the tenants on a lease option? Highly unlikely they'd be interested now that they're already moved in.

[Benjamin Riehle]

If you do a cash-out refi make sure to understand the fees and points you are being charged. May not be worth the refi if they wrap up $3,000 in fees to process the loan. 

Do you know your current cap rate pre-mortgage? Quick calculation to calculate your cap rate is:((Yearly rental income) X .65 (this is your expense multiple))/(What you would like to sell the property for)

For Example: if you rent the two units for $1,000 a month total. $12,000 per year X .65 = $7,800 and you want to sell the property for $100,000 then it would be $7,800/$100,000 leaving you with a rough cap rate of 7.8%

There is no reason you cannot sell a rental property with tenants in place. Actually, the investment market in Tucson is the strongest I have seen. I would with a number of buyers who only consider purchasing properties that have tenants in place. 

Hope this helps!