Should I SELL or KEEP this building?

[Joseph Shapiro]

Fellow investors,

I purchased an 18 unit building in a major US city some 4 years ago.  I stand to net about $800K (after fees, but before taxes if I were to sell it today  Would you sell this C class property in a nice workforce area knowing:

- I have put in a total of $600,000 into the property (HUD costs + capex)
- I cashflow about $1,500/month from it (takes into account property management fee).  By refinancing from my standard mortgage to an IO (interest only)  loan ($1M balance), cash flow would increase to $3,300.  Total cost of refi (including cost to end loan early with current bank will be $50,000)
- Rents are currently on average $100 lower than market (no upgrades required). With natural churn it would take likely 3 years to get whole new set of tenants to achieve the rent bump up.
- Assuming I refinanced and bumped up my rents [over 3 years] cashflow would increase to about $5,100 a month

I purchased the building in the hopes of supplementing my 9 - 5 job or better yet replacing it after the loan was paid.  However, netting $800,000 and recouping my $600,000 is enticing.    

What would you do and why?

THANK YOU