Quote from @Shunnel Williams:
Hi all!
Reaching out for your experienced opinion on my current conflicting battle on whether to sell or keep.
I purchased my very 1st investment property in Jan 2023- it’s a Mother/daughter. The property was occupied (still is) with 1 tenant that I am now having the exhausting pleasure of evicting. 2yrs later, said tenant continues to try every angle to delay the court granted Marshall’s execution.
The “2nd” floor was poorly renovated (bad contractors), new tenant moved in and a year later, another eviction process has started as they lost their job and refuse to move or pay.
Stuck with a very large mortgage bill (that I am paying), utilities and making small repairs to keep the property up also noting the casual 311 complaints from both tenants. I’m now struggling financially. I don’t see the value with time and effort owning this place but as a new investor, I can’t help but to consider if I hold on to it- if it will then become net positive.
I refi in Oct 2024. Purchase price $525K, appraised for $760k (no major nor significant Reno was had).
NYC eviction process is not for the weak. Unsure with the amount of Reno needed, tenant occupied and evictions in place - if the property will sell as it.
What advice can you provide if any.
Thanking you all in advance.
First off, I want to acknowledge how tough this situation is—especially as a first investment property. It sounds like NYC’s eviction process is notoriously difficult, and carrying a large mortgage while dealing with non-paying tenants is draining both financially and emotionally. When deciding whether to sell or hold, I’d suggest framing it through two key lenses:
1. Will this property help you achieve your long-term investment goals?
- If it continues to drain your resources and energy without a clear path to profitability, it may not be the right fit for your portfolio.
- A property should work for you, not the other way around. If it's becoming a financial and operational burden with no strong upside, cutting losses may be the best move.
2. The Opportunity Cost of Holding vs. Selling
- Even if this property eventually turns net positive, at what cost? Could that time, effort, and capital be better deployed elsewhere?
- You have an appraised value of $760K after your refinance last October. Depending on your equity position and market conditions, you might be able to sell and reallocate that capital into a more stable, cash-flowing investment by a 1031 exchange rather than waiting for a turnaround that may never come.
- Sometimes, the best move is letting go of a problem property so you can redeploy funds into an asset that aligns better with your long-term goals.
That said, if selling now would put you in a worse financial position (due to tenant complications or a distressed sale), you may need to stabilize it first. One potential approach could be strategic renovations and a better tenant placement process after the evictions. But if the stress and financial burden are outweighing the potential upside, this might be a great time to cut losses, free up capital, and reset for a more promising opportunity.
At the end of the day, successful investors make decisions not based on sunk costs but on future potential. If this property no longer aligns with your vision, it might be time to move on. Wishing you the best—tough decisions like this are what build true investing experience!
