Trapped equity, hold or sell?

[Brian Szykowny]

Long time listener, first time caller.

I bought a SFR as an investment property in 2013. It was a REO foreclosure sale, with a tenant, and needed some work. Long story short, in 2020 my tenant moved out, I did a cash out refi with a 3.875% rate, remodeled, and increased rent and overall value. It currently cash flows $700/month after taxes, HOA, insurance, etc.

If I sold, taking into account the costs to sell, I could make between $390-$440k in profit. I would 1031 exchange that into another rental property. I would like to get into a 4plex, or even a 5-6 unit apartment building.

Is it a crazy idea to sell? I want to level up into a multi family property that can cash flow ~4 times what I’m making now, and can build more equity.

What would your advise be for someone in my position? “They” say never sell…

[Chris Seveney]

Quote from @Brian Szykowny:

Long time listener, first time caller.

I bought a SFR as an investment property in 2013. It was a REO foreclosure sale, with a tenant, and needed some work. Long story short, in 2020 my tenant moved out, I did a cash out refi with a 3.875% rate, remodeled, and increased rent and overall value. It currently cash flows $700/month after taxes, HOA, insurance, etc.

If I sold, taking into account the costs to sell, I could make between $390-$440k in profit. I would 1031 exchange that into another rental property. I would like to get into a 4plex, or even a 5-6 unit apartment building.

Is it a crazy idea to sell? I want to level up into a multi family property that can cash flow ~4 times what I’m making now, and can build more equity.

What would your advise be for someone in my position? “They” say never sell…

 The answer to this question is do you have a better place you can invest this money that will yield you a better return than this asset? If the answer is yes then sell it, if the answer is not sure or no, then I would hold on to it.