Sell at a Loss or Bring in Investor? Looking for Advice on Underperforming TX House

[Yulya Marucya]

Hey everyone — I’d love your input on what’s honestly been a frustrating situation.

I bought a home in Austin, TX (Pflugerville to be exact) back in 2021 as an Airbnb investment for $420K and put in about $80K into it (5% down payment + repairs). Fast forward to today: home value is $400K so much less, it's cash-negative and I’m facing a tough decision: sell at a loss, or try to bring in an investor to restructure this into something that breaks even and eventually appreciates.

Here’s the breakdown:

📉 Current Monthly Expenses:

• Mortgage (P&I): $1,675.13

• Insurance: $269.42

• PMI: $121.00

• Property Taxes: $602.80

• Utilities (avg): $650

➡️ Total Monthly Expenses: $2700 w/o utils or ~$3,350 with utils, not even factoring in fixes or capex.

I also have a hot tub that costs $185/m to service and two beautiful Koi ponds that also cost around$115/m to maintain.

💡 What I’ve Tried:

• Airbnb: Net loss of about $8,000/year (after cleaning, taxes, etc.) and a lot of hassle

• Mid-term rental: Listed furnished at $3,400/month on Zillow — no serious interest yet, no competition either which means there isn't much demand for mid-term furnished rentals in Pflugerville

• Long-term rental: Would actually perform worse than Airbnb (close to -12K/year) unless I bring in an investor to lower the monthly mortgage cost

🧠 My Dilemma:

• My mortgage balance is 370K. Selling now would mean taking a ~$100K total loss, probably even need to pay 10K out of pocket now to cover fees, plus losing my 3.5% mortgage (big asset in today’s 7% market)

• I’ve been considering bringing in an investor to contribute $90K–$110K, eliminate PMI, recast the loan, and reduce monthly payments by ~$750 which would allow me to rent this long-term and break even. going forward, hoping for appreciation.

• I’d offer them a share of appreciation or equity (e.g. ~30% of appreciation over 5 years or ~45% equity), which gives them 10–12% IRR

• However, I'm not sure how many years it will take to reach target 600K home value from current 408K for this to make sense.

• Hope is not a strategy but I do believe in Austin market to become hot again, the only question is when.

🔍 What I’m Looking For:

• Would you consider investing in a deal like this if you were in their shoes?

• Am I missing a more creative option?

• Would selling and taking the hit now be smarter than waiting and losing $8–10K/year in hopes of recouping it later?

• Is there a smarter way to structure this deal to attract the right capital partner?

Happy to answer questions or run numbers. Appreciate any thoughts or experiences you’re willing to share 🙏

[Jaycee Greene]

Quote from @Yulya Marucya:

Hey everyone — I’d love your input on what’s honestly been a frustrating situation.

I bought a home in Austin, TX (Pflugerville to be exact) back in 2021 as an Airbnb investment for $420K and put in about $80K into it (5% down payment + repairs). Fast forward to today: home value is $400K so much less, it's cash-negative and I’m facing a tough decision: sell at a loss, or try to bring in an investor to restructure this into something that breaks even and eventually appreciates.

Here’s the breakdown:

📉 Current Monthly Expenses:

• Mortgage (P&I): $1,675.13

• Insurance: $269.42

• PMI: $121.00

• Property Taxes: $602.80

• Utilities (avg): $650

➡️ Total Monthly Expenses: $2700 w/o utils or ~$3,350 with utils, not even factoring in fixes or capex.

I also have a hot tub that costs $185/m to service and two beautiful Koi ponds that also cost around$115/m to maintain.

💡 What I’ve Tried:

• Airbnb: Net loss of about $8,000/year (after cleaning, taxes, etc.) and a lot of hassle

• Mid-term rental: Listed furnished at $3,400/month on Zillow — no serious interest yet, no competition either which means there isn't much demand for mid-term furnished rentals in Pflugerville

• Long-term rental: Would actually perform worse than Airbnb (close to -12K/year) unless I bring in an investor to lower the monthly mortgage cost

🧠 My Dilemma:

• My mortgage balance is 370K. Selling now would mean taking a ~$100K total loss, probably even need to pay 10K out of pocket now to cover fees, plus losing my 3.5% mortgage (big asset in today’s 7% market)

• I’ve been considering bringing in an investor to contribute $90K–$110K, eliminate PMI, recast the loan, and reduce monthly payments by ~$750 which would allow me to rent this long-term and break even. going forward, hoping for appreciation.

• I’d offer them a share of appreciation or equity (e.g. ~30% of appreciation over 5 years or ~45% equity), which gives them 10–12% IRR

• However, I'm not sure how many years it will take to reach target 600K home value from current 408K for this to make sense.

• Hope is not a strategy but I do believe in Austin market to become hot again, the only question is when.

🔍 What I’m Looking For:

• Would you consider investing in a deal like this if you were in their shoes?

• Am I missing a more creative option?

• Would selling and taking the hit now be smarter than waiting and losing $8–10K/year in hopes of recouping it later?

• Is there a smarter way to structure this deal to attract the right capital partner?

Happy to answer questions or run numbers. Appreciate any thoughts or experiences you’re willing to share 🙏

Hi @Yulya Marucya! I've been hearing more and more about investors like yourself getting upside down on their STRs. While bringing on an investor might relieve some of your stress, I'm not sure how bringing them on would improve the profitability of the property (short of a modest improvement in cash flow after debt service, but that's not part of NOI anyway). Also, offering 10%-12% IRR won't get you anywhere with a seasoned investor - you'll need to be closer to 18%-20% given the current position of the property.