So you have to weight risk to reward.. and sometimes we have to eat one that we bought it happens..

They also are thinking of getting a different PM to manage it after they can gain back control but would like advice on doing so.

There are pros and cons but i believe for most properties the cons out weight the pros.  

If your portfolio is large enough, 5% is better.Now, some people believe that this diversification reduces the chances for a large gain.  

@Ketch BaysStarting small in a cash-flowing market is a smart way to gain experience and build confidence without overextending yourself financially.

If done right most of these gains are tax-free- $40K in equity capture (profit) with $20K out of pocket and 13% cash on cash thereafter (300%+ returns)- $24K of equity capture with $32K out of pocket and 36% cash on cash returns thereafter (75%+ returns)- $41K of equity capture with $27K out of pocket and 12% cash on cash returns thereafter (150%+ returns)None of the above numbers include loan pay-down or appreciation. 

Hello, we are just starting out our investment journey. we have one STR property and 1 LT property and I want to gain more knowledge of it. 

@Jason Wray Thank you very much for this response ..I’ve never sold one of my rentals before feels like I’m cutting off a leg and paying close to 100k for cap gains is really starting to eat at me 😵‍💫Any chance you would be so kind as to send me a link to something in the ballpark of what you’re suggesting this way I can get an idea of area and what this type of property could look like!

Given the size of the asset, these won't be huge, but something to consider.REWARD - In addition to the benefits stated above, the only other reason I could see doing one on an asset this size is if you wanted to offset a property sale that would have a large capital gains. 

Do you think this strategy gains strength if lets say... in five years interest rates are at 5.5 vs 7.5 now?