4 unit multi-family advise

[Omar Ababneh]

Good day, 

My partner and I purchased (2) 4-units multi family properties in a good in St Louis MO (63123) back in Sep 2021. For around $375,000 each, I only own 2 of the 8 units and my partners closed his part of the loan so I'm carrying the loan now with a net of negative $500 a month if all units are rented. I'm out of state and have a property management company charging 8% but I don't have much options due to not  being in town. 

I'm working on increasing rent but it will not be significant as I already did after the purchase, thinking about refinancing but interest rates are high now and I had the loan with 4.25%, contacted a specialized company to see if the property tax can be decreased, working with insurance company to provide 5% discount and tried the RUBS option but it's not common in STL but would to get anyone input/ advise on this situation. 

Thanks in advance. 

Omar 

[Andrew Freed]

@Omar Ababneh - So you have a negatively cash flowing property? Where are rents now vs. where they can be? If you're already close to market and still negatively cash flowing 500 a month, you should consider selling. Real estate is meant to provide passive income, not drain your excess cash each month. You will max out quickly if you had to feed the "alligator" properties each month.

The good news is if you purchased it in September 2021, you most likely have equity in the properties hence you might walk away with some money, which is better than feeding an investment 500 each month. If it doesn't cash flow and most likely won't in the future, give rid of the asset as soon as possible.