When to Throw in the Towel?

[David Katz]

I purchased 2 turnkey properties through Memphis Invest (now REI Nation) in 2019. Everything was going well with both until about a year ago. For one home, the tenant went bankrupt in mid-2020 and stopped paying rent entirely. This dragged on for many months until the tenant voluntarily left in early 2021. Of course, none of that is the fault of REI Nation, given the unique circumstances of 2020. And that kind of thing happens from time to time.

Soon after, REI Nation placed in a new tenant to a 2-year lease. But now, only 4 months into a 2-year lease, the tenant has not paid their rent for August, made promises of payment, and have failed to follow through to this point. So just 4 months after one nightmare scenario ended, another one seems to be beginning. At this point, I don't know what the cause is. REI Nation is the gold standard, so I would like to think its not some flaw in the tenant screening process (and the other property is performing very well, and I have nothing but positive things to say about REI Nation). But regardless of the cause, I'm starting to question whether this is something I should continue with.

I'm only 34, so there is a long time to dig out of the hole.  But on the other hand, I have the option of simply selling the property and taking advantage of the great price appreciation that occurred over the past year (I bought for $156,900, and the estimates on Zillow, Trulia, Redfin, etc. say the value is getting close to $200k, though I take those with a grain of salt).  What would you do in this scenario?