Need advise: Should I sell remote rental property?

[Ian Ashcroft]

Longtime lurker around here - this has been a great place for me to learn over the past few years. Now, I could really use some perspective from people who have been in my shoes.

I live in a very expensive area on the west coast, and have owned a duplex rental property in North Minneapolis MN for just over two years now. I'm in my 30's and this was my first ever. It constitutes the bulk of my investments, aside from a small IRA and an emergency cash savings. Purchased for $175k, currently have a mortgage with 106k remaining @ 5.5%. This means that payments are $1145/mo ($730 + $417 escrow). Yes, I do realize that I can refinance right now with a credit union local to the MN area, and could get an interest rate closer to 4.1% for 30yr, and that would decrease my payments by $220/mo. I haven't done that yet, because I am torn on whether I should sell due to some recent events.

Total rents for the duplex are $1700/mo. I had a tenant move in last month that appears to have lost his job and is not paying rent (I didn't do a great job of vetting). The eviction moratorium is in place at least through the year. I'm willing to work with him, but he's not especially cooperative, and this could develop into an eviction. I had to evict the tenant that came with the building, and had countless payment issues with two other tenants that turned over quickly thereafter. I'm on my banks forbearance program right now, and it is helping me absorb the impact of missed rents. But, I'm wondering if this is going to be the ongoing experience in North Minneapolis... sigh.

The other tenant in the larger unit of the duplex is a family member that has been acting as a property manager. However, due to life changes, he is likely to move to the east coast by end of year. His rent was intentionally lowered by $200/mo as compensation, and is in line with what property management groups charge in the area for a duplex. I am VERY concerned about owning this property when neither myself, nor anyone else I know, lives in the area. I have a 9-7pm day job and which limits my ability to get directly involved. I would be OK to raise the total rents back up to $1900/mo (market) and then bring in a property management group. I am worried about high tenant turnover and their "first month's fee" each time adding up. I'm also concerned about being at the mercy of their contractors and snow removal costs, etc.

In the last two years 30k$ in repairs have been made. It has been quite a headache, but the property is at least at a point where I see no more major expenses (roof, interior, all in great shape). It is an attractive property, but in a somewhat depressed area. Due to appreciation, I could sell the property right now for about $225 and break even with everything I've put into it. This accounts for all closing costs, depreciated basis, etc. I'm getting cold-called by realtors with some regularity.

I know real estate is a long game, but this has been a very stressful and expensive 2-3yrs. Here is a summary of my major concerns going forward:

1. 1. I am about to become a TRULY remote landlord, with no genuine network of my own in the area.
2. 2. I expect bringing in a professional property management group will cut into margins further than the flat $200/mo I already pay my PM.
3. 3. I just signed a 1yr lease with a non-paying tenant. I expect losses immediately, as well as an eviction or legal action after the moratorium ends. My last eviction was not handled well, and I'd almost certainly need to get a lawyer this time.
4. 4. The property has not had a positive cash flow. My initial models had it flowing +155$/mo, but my relatively high day-job salary has put me in a tax rate that offsets it, and has also caused my passive losses to be carried over (total 16k$) instead of being used to offset gains.
5. 5. Minneapolis is a sellers market now, despite my North area not being as desirable. A looming foreclosure crisis, unstable economy, and an election are in the near future.

On the other hand, I could refinance today and add $200/mo to my cashflow. Maybe professional PM won't destroy the margins, maybe my tenant will pay rent, and maybe this isn't the momentary home value peak that it feels like.

If I sell, I can use the break-even proceeds to buy a local primary residence or some other investment

What would you do if you were me?