All Forum Posts by: Lexi Blocksom

Going through this exact thing right now. Hoping the loss isn't too bad so I can 1031 local. All these gurus tote how great OOS investing is but in practicality it can be very difficult if you aren't experienced in that market and/or know people. 

Yea this is what I want to try to do. I just hope I get enough out of this property to put into another. 

I am not related to him

I completed an annual inspection at my tenant's home recently, and found that he was subletting. It is a 2 bed, 1 bath house, in which he is subletting to at least 3 or 4 other people. He installed doors on the living room to turn it into an extra bedroom. This was all without my knowledge or permission. His lease clearly states no subletting. Obviously I have grounds to terminate the lease, but I'm wondering if legally I can just increase his rent to cover the extra wear and tear. My concern is this may be considered retaliation, but really its just that all these people are wearing the property down. He is month-to-month. I'm wondering if I raise the rent without getting in a bind? And should I state this as a reason as to why his rent is being raised. 

At the end of 2023 I purchased an old 4plex out of state (MD) for $180k (it appraised for this amount), 20% down with 7.99% rate, mortgage is $1364 with piti. Its in a lower-income area where the current rents are $400, $650, and $800 (vacant could rent for $600). On paper it made sense, but in reality its been a nightmare. I have cash flowed negative almost every month. The inspection report did not mention many of the expensive repairs I'm facing.

For one, one of the units cannot even be rented until I spend at least $10k getting the electric up to code, among other repairs, so its been sitting vacant. I have a property manager, but my checks are only a few hundred a month if I'm lucky after all the fees and expenses. I have shopped around for a different PM but there are almost no other options in the area. It seems like there's an issue at least once a month that I must pay for, on top of trying to budget to fix several leaks (roof included), radiator not working, no shower in one unit, etc. I highly doubt this house will sell for the $180k I paid, let alone more than that.

Comps in the area go for $60k-$160k at most now, and they all sit on the market for 180+ days. If I'm even able to find a buyer, I will more than likely lose every penny I put into it and probably have to pay. If I decide to do the repairs and continue renting it, I will cash flow positive a bit, but to get to that point I would have to spend thousands (replace entire electric system, roof replacement, etc). I have two local rentals that cash flow nicely, but all that profit is thrown towards this house so I'm completely negative. 

This was my first property that I purchased solely as an investment, and I'm realizing I did not do my due diligence. I hate the idea of losing over $60k (took HELOC from my paid-off primary) in which I'm paying for each month, but I'm terrified of all these expenses completely draining me. I thought about doing a 1031 for something local but I wouldn't make enough for the 20% down payment. Any advice would be appreciated.