I am a buy and hold investor in Pasadena, Maryland. I currently have 1 single family home and one triplex in the area that I self-manage. I was living overseas for the last three years and just returned home last month. One of my tenants in the triplex moved out Aug 31 and when I went by the property to see what all I needed to fix I started realizing there is a lot more work on the overall place than I was expecting. I always new it needed some work, but more so now that I have been away for a while. I am not really sure the best course of action to take especially since one unit is vacant, one unit is rented until 31 July 2020, and one unit is rented until 31 July 2021.
Just to give an idea of some of the work: It needs new siding, the floors in at least 2 units are not level (although I don't think it is still shifting), the roof looks a little wavy, it needs gutters because the rain is starting to wash away around the foundation where it runs off the roof, the electric meters are pulling away from the house, and the electric bills are way too high for the size of place.
One option I see is to clean up the vacant apartment (new paint, new carpet, etc.) and rent it out. Then fix things over time with the highest priority first; Like the electric meters pulling away from the house. This gives me the income for all three units and I just keep spending money as things break, but doesn't really give me the chance to fix some of the underlying problems.
A second option is to try to sell the property. However, since I have been out of the area for a while I am not sure what the property would be worth. I think I could pull about $100k after paying off the mortgage and all expenses, but could be way off based on how much work the place needs I am not sure if I will get that much for it. I would probably try to take any cash I get from it to buy another property as well. I feel like this is the option I am leaning towards, but don't know how that will work since I have some tenants in there for a longer term.
Finally, I could try to rehab the place. I could try to pull some equity out of the house and use the money to rehab the place. I think I would do it one unit at a time as the leases come up, but some of that might be hard as some of the repairs might require work in multiple units at the same time. I am not experienced with rehabs so would not be sure what I am doing. I like this option because I keep the place, spend the money now to fix it and potentially limit major expenses later and still have everything covered by the property and the rents. I currently pull in about $45,000/year and my mortgage principle, interest, taxes and insurance are only about $20,000/year.
I know this is not a lot of information to go on, but if anyone has some thoughts I would appreciate hearing them.
