Need your expert advice! Selling a very good rental vs holding

[Taylor Hellenbrand]

Hey everyone! I am desperate for some of your expert advice here, I am 29 and relatively new to real estate investing. So I have been doing some serious debating for a while now on whether to sell one of my very good cash flowing 4 bedroom 4 bathroom single family rentals in the hot, in my opinion overpriced, Madison, Wi area for a large profit and reinvest the profit into a larger property or to hold onto it and keep the cash flow coming in. My current long term renters are moving out in 30 days and that is what has spurred this big decision.

Here are the numbers and the situation we are in, we have about 60k into this property comparables are selling in my area for 160k-180k so we are set up to make a large profit if we decide to sell and reinvest the profit in a larger multi family property, the downside is it is very hard to find a good deal in this area and we would most likely have to over pay in order to find a 1031 exchange property.

Rent is $1,000 per month, there is no mortgage, taxes $3,500 with the tenants paying all the utilities so the cash flow is very solid and it will be fairly easy to rent in our hot market. The downside to holding on to this property is it will need new windows and a new deck in the next 5 years and is on 3/4 acre lot so mowing and yard work are a challenge to have the tenants take care of. Also it has 4 bathrooms which makes it a maintenance struggle for a single family but good when it comes to reselling.

So am I an idiot for selling such a good cash flowing property when my real estate strategy is buy and hold? Or should I be taking advantage of this hot market and sell this property at a peak selling price? Grrrrrr this has been keeping me up the past few nights any and all of your advice would be greatly appreciated, thanks!

[Chris Youssi]

# 1 CY Proverb " You can never lose money by taking a profit!".Madison about 50 minutes due north from me and our market also overpriced for SFR homes we like to add to our portfolio. Couple of questions / comments

1.) What are your short term 1 year medium 3-5 years and long range objectives 5+ years and how does holding vs selling into these plans?

2.) I am a huge fan of rehabbing like new when we purchase anything so there is minimal maintenance on any of our 30+ SFR. In 2017 we spent on average $47/month / unit with an average value of $110k. The comments you made about some repairs would be a concern windows deck etc...

3.) Have you scoured the market with a Realtor who specializes in your market with investors? I would start here and also get an accurate value for the prop.

4.) Another alternative - I think your best is to do the rehab now and force more equity then sell - reinvest . Madison was very stable thru the correction - head south to Janseville or go 20 minutes in all 4 directions for better values on your purchase after sale.

Happy hunting!