Any value in holding expensive and appreciating non cashflowing property?

[Khaled Majouji]

Ok this may or may not be long, so if it turns out to be, please bear with me :mrgreen:

I currently own a 3 unit building that I plan on converting into a 4 unit later this year (the garage will go and I will build a 2nd unit in the basement)

Buildings of this type on my street sell for about 14 times their revenues (yes you read that right!) and my revenues after building the 2nd unit will be at 36000$ per year. Vacancy rate in my area is below 1%.

This puts my building's resale value at about 504 000$. I currently owe 200 000$ on it. So my equity is 304 000$.

That beeing said, I would like to know if there is any value in holding on to such an expensive piece of property that will never cash flow. I've been keeping it because appreciation is good and will continue to be, but I can't help but tell myself that this equity may be able to earn me more if invested in cash flowing real estate.

I also have about 150 000$ in cash coming in later this year and would like to know the best way to invest it. My ultimate goal is to own hundreds of units but I'm a bit unsure as to how I should start.

I was thinking of buying 3 cash flowing buildings of about 8 units each.

Any input is very much appreciated!