Would you keep for the long term or sell this property?
- Purchased a 1960's vintage building, 18 units, in 2017 for $1.5M
- In a major urban city in the northeast
- Put $400K down and have paid down $100K in loan (so the balance is $1M)
- Purchased it to supplement my 9 - 5 and use it as a resource of income to retire (15 20 years from now)
- It's comprised of studios, 1 bedrooms and 2 bedrooms. General square footage is on the small side.
- It barely squeezes out any money per month. In its best year, 2023 it cash flowed $3,000 a month before increase in property tax and utilities have squandered it down to maybe $1,500. Moderate rent bump this year has prevented it from going down any further.
- It's been well kept
- Between transaction costs (e.g. broker fees, transfer fees), capital expenses, tax recapture I would need to sell it for $1.9M to break even.
- At it's height (2022), it could have sold for but $2.7M. Now it could sell for $2.1M.
- Would you sell for a gross profit of $300K or keep it, with a cash flow of about $1,500 a month?
- I haven't been able to find any 1031 opportunities (buildings or otherwise) to roll the money into
I appreciate learning your thoughts on whether to sell and keep.
