Looking For Advice on Turnkey Midwest Rental Properties!!!

[Jon Licht]

Hi all!  I am looking for some advice.  I have been a real estate investor for 3+ years.  I purchased (3) turnkey properties with conventional mortgages under my name. In analyzing my portfolio this weekend, I identified a few things that surprised me. I would love any advice on next steps.

Key Findings:

• The concept of ‘passive cash flow’ has turned out not to be true. In 3 years, all of my properties are negative aggregate cash flow (if I include closing costs).
• My properties are all overperforming expectations due to appreciation. Pre-COVID, my ROIs were 20%, 20% and 50%. Post-COVID, due to massive appreciation, ROIS are all above 50%.

Conflicting Ideas for Next-Steps:

• Who cares about cash flow when you have a 50%+ passive investment. Transfer all of these properties to a non-recourse loan and hold.
• The COVID appreciation spike won’t last. 1031 exchange these properties to a multi-family that cash flows.