Seeking Exit Strategy Advice for a San Antonio Tri-Plex

[Dan Shallcross]

Hi all,

I bought a tri-plex in San Antonio, TX in December 2023 as a VA house hack for $450,000. The property had a prior renovation and currently has no problem tenants, but I've had a few unexpected expenses — $3,000 for a rat issue and $2,200 for damages left by a departing tenant.

I also experienced a bad property manager who left one unit vacant for 4 months while I was deployed. I had to fire them and hire a new manager who charges 10% of base rents (~$318.50/month).

I’m now cash-flow negative. At purchase, I expected rents of $1,500 per unit, but current rents only total $3,735/month across all units, and I also pay utilities. The property value has declined to around $430,000, and I owe $446,153.

I’m trying to figure out options for getting out from under this investment quickly without dumping more money in, or whether there’s a realistic path to stabilize and turn it around. Any advice, suggestions for exit strategies, or perspective on whether it’s salvageable would be greatly appreciated.

Thanks in advance!

[Michael Smythe]

@Dan Shallcross welcome to the realities of investing!

Every new investor does their analysis on paper and then wonders why those numbers aren't being met:(

First off, don't blame the first PMC you fired - you hired them and didn't screen them well enough!

Even with this new PMC, how much time have you invested into understanding:

1) How they advertise your vacant unit?
2) Where they advertise your vacant unit - each website?
3) When have you verified these listings by Googling them?
4) What's the nitty-gritty of how they screen applicants?
5) And so much more!

If you want to stay hands off, that's fine, but this is what you end up with: firing PMCs to solve problems you really don't understand - you're just not happy with the results and hope changing PMCs will get you the results you want.

You're now using this same approach by posting here, hoping someone has a magical solution for you, but what have you done to address the issue?

How much research have you done for the local market regarding MTR and STR that could boost your rental income?

What about doing the same any extra bedrooms in your Great Falls, MT home?

If you were to talk with investors that have been at this for 10+ years, most of them would tell you they've been through this same basic challenge - weathering the storm of a cashflow challenge. Those that persevere become better investors and wealthier ones:)