Thanks to all of you who took the time to respond to my questions. I am truly amazed at the generosity and kindness that so many of you have exhibited with your thoughtful replies. I'll soon try to get a picture of myself uploaded so that you can put a face to the name.
After sleeping on this, not so well by the way, I think that I am beginning to get my head around one of the most difficult challenges that I am facing, and perhaps others face, when presented with these types of dramatic life events. The specific issues with my tenant are really symptomatic of a much larger and heavy issue. Prior to my father's passing, I had no real comprehension of his net worth. We were estranged and aside from the grief of loss, what I'm struggling with is the shifting of mindset from wage earner to investor.
Those of you who are offering the advice to sell, I think I get it. I can borrow against the money in the houses, but the money locked up in the CA houses can be making significantly better money elsewhere, ideally without greatly increasing my exposure to risk. I can always borrow against those new, better performing assets when it comes time to expand my portfolio. From an investor's point of view, the goal is to always have your money making money and to assess risk and reward. So my San Diego properties are like the T-Bills of real estate, and I can likely manage a significantly better return by eventually learning and developing skill in a real estate investment strategy that I can apply closer to home. My learning curve and comfort level with analyzing risk can define my next moves. There is an opportunity cost to holding on to the houses,(a rate of return that a seasoned investor would not accept), but they are cash flowing right now, so no immediate rush to sell.
If I hold on to the properties long term, out of sentimentality or risk aversion, I am betting on appreciation. It's hard to not overvalue this variable since the only reason I have this asset is because my Grandmother was fortunate that her late, 3rd husband had the foresight, or dumb luck, to buy these houses back in the 60's. But I seem to recall reading somewhere that using past performance to predict future performance is not a sound investment strategy, although it's very emotionally compelling.
For the vast majority of my working life I have followed a path that trades my time for a very modest, predictable wage and decent benefits. Money was something to be budgeted and used to live on with occasional indulgences or escapes from the routine. There was always an unstated belief that I was lucky to have a job, and although the money wasn't great and there never seemed to be quite enough, I was at least making ends meet. I had no aspirations that I would ever be in a position to invest beyond a modest retirement fund, and felt that I would most likely "work" for most of the rest of my life.
This is a very difficult mindset to shift. It is hard to see things from this different "investor" perspective. Thanks again to all those on this forum for helping me understand some of the smaller things that led to this larger realization. I look forward to continuing to learn with all of you. Don't worry I won't do anything rash, but I may begin to venture down this road less traveled with some of you.
