Thoughts/advice on two rentals

[Mark Sia]

Hi all,

This is my first post here on Bigger Pockets besides my intro. I have been looking at the site for a while and wanting to post more but my two young kids and my military career doesn't leave much extra time these days. I'm looking for some thoughts/advice on two rentals that I currently own.

These properties are located in the Dayton, Ohio area. I have owned them since 2008 when I was stationed there. I now live in Texas and have both properties being managed by a property manager. I'm trying to make a decision on if these properties are worth keeping, or if I should look at selling them. Unfortunately since moving away these properties have been taking a continual loss and have felt like more of a burden than anything.

The first property was refinanced a couple of years ago out of a land contract with its previous owner. I currently owe $31,000 on the loan and the property is valued at about $43,000. The market in Dayton took a dive since the properties were purchased so both have gone down in value, but I'm hearing that it's starting to come around again. It is a single family house rented at $550 and the loan payment is $336. After the property manager I am left with about $158 cash flow before maintenance. Unfortunately I just received word from the property manager and during an insurance inspection that it needs an entirely new roof. The estimate is about $6000.

The second property is the one that we lived in while stationed in Dayton. We expected to sell it when moving to Texas, but decided to rent it for a little while as it is one that took a pretty good hit from the market. We owe $95,000 and the value is only around $82,000. It is rented at $895, we pay $852 a month on the mortgage. After the property manager we are taking a loss of about $46 in cash flow. I discussed refinance options with my financial institution. If the appraisal would come back at about the price owed, the payment go down about $200 a month. If I refinanced I would need to keep it long enough though in order to make a refinance worth it. If I sell instead, I would want to wait until the value comes back up before selling it.

For both properties combined, the cash flow is about $112 before maintenance. Unfortunately the maintenance costs have been high this year, it seems to be one thing after another and I'm taking a big loss on both right now. The first property was the first deal I did after getting involved in real estate investing. I rehabbed the house and have put a lot of time and money into it. About a year and half after buying it I deployed then moved to Texas about a month after getting back. In addition, my wife and I have had two kids during the time since buying the property. With all of this and living in Texas my focus shifted away from investing and towards my military career and kids. Even though I have a property manager, it is has been tough being long distance from these properties since I can't easily go see for myself what is going on.

When my wife and I got into real estate investing we were both working and didn't have kids at the time. Now she's a stay at home mom and these continual losses only add to the frustration as well. Luckily we have a good amount in savings that can cover the costs, but the expenses/maintenance on these houses are just not allowing any sort of profit.

When we first got into investing, we were hoping to keep at least the first one long term to add to retirement, but now they are both feeling more like a burden. We're trying to determine our options and if these are even worth waiting out and keeping long term or if we should sell them as soon as we can and cut our losses.

Sorry this was so long but I'd greatly appreciate any thoughts or advice! Thanks!!