HELP - Should I Sell At A Lower Price For Liquidity?

[Angelo Wong]

I no longer really want to do out-of-state SFRs so wanted to sell my Memphis house.

• Spent about 9k on rehab from property management company, but didn't look good.
• Hired a realtor, he said I should spend another 16k on it since it is only 'rent ready'. As is, he says I would only be able to sell the house for around 180k.
• I did do the additional rehab for an additional 16k. Had open houses and prospective buyers didn't offer because they didn't like trees in front of house. Spent another 4.2k cutting down trees.
• Currently listed at 219.9k (38125)
• Now realtor goes and tells me that the floorplan is not so good and implies the probability of someone buying it for a primary is low and I might consider selling it to an investor at around 180k. This translates to about a 20k sunk cost

Question is, should I sell this at 180k now for liquidity, or should I hold onto it and re-rent it out and sell it to an investor later on at 180k? As an investor, I am chasing net worth appreciation and not cash flow currently.

My math is basically this when comparing my options between selling now vs. selling later.

If I rent it out for the next 3 years:

It'll be about $1700/mo for 30 months, minus maybe 20k for turnover costs and about 3k in insurance, or (1700 * 30 - 23000) = $28000 in gross profits. This assumes a 2 turnovers with 2 vacancies, and 2 months to get a tenant from now. Rehab is already done and actually above rent-ready levels. I do not account for mortgage / taxes because the interests and property taxes are deducted year-end and I get the equity back from my PITI payments when I sell 3 years from now anyway. Also keeps the math simple.

If I were to say sell it now at 180K then my math is:

180k sale (minus fees), and I'd put it in the stock market at an annualized return of 7%. 20Y average return for S&P500 is 7.53%. Thus, my gross profits would be ballpark:

=(180000*0.93)*1.07^(3)-(180000*0.93) = $37672, or about 34% more than if I were to hold over a 3Y horizon.

So seems like even though there's that 20k wasted sunk cost, "the best I can do" in my situation in increasing my net worth is to take the L and then go ahead and liquidate? As this seems counterintuitive, I wanted to ask:

1) Is my math roughly right?

2) Should I hold and re-rent it out and build equity, or sell at 180k now?