Have 6 properties, need some advice on weather to keep 1 or sell

[Asher Anthes]

Hey guys, just need some advice here.  I'm in Charlotte, NC and have 6 total properties (1 is my primary.)

The first one I bought is now worth about $240,000 with a little work, and I owe $130,000.  My tenants in that property are moving out in a few weeks.  If I want to keep it as a rental I need to put in $10,000 into floors and paint.  If I want to sell it I probably need to put $15,000.   The property would rent for $1700.

I have about $120,000 liquid already to continue buying properties, but my question is would it be wise to sell this one and use the additional cash to buy 4-5 more distressed properties cash this year and refinance them.

That property would currently only be producing a 7% cash on equity return.  If I rolled those proceeds using a 1031 in several more $80,000 to $100,000 properties I could get that return up to 30%+ easily.

I've never sold a property before, and my strategy up until now has just been keep buying.  But I'm trying to figure out when it makes sense to move equity around like this.  Also, who knows how long 6-8% annual appreciation will keep up, everyone out there says it's slowing down significantly.

My primary goal is cash flow (1st) with long term equity build up (2nd).

Thanks for any input!

[Mark Creason]

Originally posted by @Asher Anthes:

I didn't realize that the new property or properties have to exceed the value of the sold property.  This may be difficult, because my goal is to go from one $240,000 property to several 80,000-100,000 properties.

I'm meeting with an accountant and a 1031 intermediary to find out more details.  Thanks for all your help guys!

 Asher, 

You need to buy more than 240,000 combined.  There are other qualifications too.

Mark