Keep and push through repairs, or dump/sell? Multi-Family Chicago

[Kevin Hunter]

Hello BP Community! Finally signed up to this platform, probably should've done a while back! Born and raised Chicagoan and dived in head 1st in the market over a year ago, took a chance on a 2 flat all brick multi-family property located on S. Side (West Pullman)...Was well aware of repairs that were needed but I felt the potential was there as area also appears to be coming back. I passed up a ready to go SFH in the S. Burbs that would've produced immediate cash flow because the 2 flat would net more when fully occupied. I've completely remodeled the 1st floor unit and planned to rent that out, prior to using any more of "personal funds" to complete 2nd floor unit. Found out a few mths ago that the "low water pressure" in the building wasn't just a simple "rodding out" as I was originally told. It is now a $10K job that requires digging to run a new water line into the building due to the age of the pipes underneath. I've confirmed the price by quoting with more than 3 plumbing companies and even the city came out to make sure it wasn't an issue on their side. I've easily thrown ~$20K already, I've got a mortgage on the property, thankfully not causing to much strain on me, but regardless, i'm losing $ every month I'M Paying the mortgage and not a tenant. BP Community HELP! Do I Dump this and hope to recoup my sunk costs by selling and redirecting my sights elsewhere? Or do I stick it out with the long-gain in mind? Brick 2 flats are hard to come by at decent pricing in Chicago, regardless on the sides of town. any help is appreciated!

[Tom Shallcross]

@Kevin Hunter it's completely your call if this property fits into your long-term vision. FWIW you're gonna get 10k punches in the gut, they unfortunately happen to all of us.

I want to chime in that the revitalization you mentioned is happening in traditional Pullman, and it's a pretty big difference being west or east of cottage grove. It'd be nice if West Pullman and Roseland eventually got some appreciation out of it, but in my opinion they won't see an immediate revitalization. 

My reasoning behind this assumption is they just don't have the desired architecture, historical ties, or most importantly, city-backing/pumping in jobs like traditional Pullman and the areas East of CG. They also still have a ton of inventory for under 40k along just sitting on the MLS (along with an increase of tenants not paying rent which may lead to more inventory).

I know plenty of people who make great cashflow in West Pullman, and your investment can still serve you well, so keep at it. I would just be weary to call it an appreciation play. Maybe get a halo effect if that south section of Traditional Pullman continues to rise, but I wouldn't base my strategy on sitting on an immediate appreciation pop.