To sell or not to sell 16 unit apartment complex

[Jeff Moore]

Hi Everyone,

I have a 16 unit apartment complex that I currently owe $490,000 on. I cash flow after all expenses plus 10% Capex, 5% repair and 5% vacancy about $70,000/year. I have an offer to purchase for $1,300,000. I am wondering if I should sell and 1031 now or just hold onto and cash out for new purchase. My current interest rate is 4.5%. I almost feel like I should sell and find another underperforming complex and fix that up like I did this one. Any thoughts or questions would be greatly appreciated.

Jeff Moore

[Michael Le]

What are you current loan terms? A long term 4.5% fix rate loan is pretty attractive in this current debt market. You'd be looking at a much more expensive bridge loan for any new heavy value add property and that could work against whatever you're doing to fix it up.