Thoughts on two options in two areas

[Andy Sabisch]

We are planning on relocating on 6 months and rental housing in the area we will be heading to is markedly less expensive than our current area.  We plan on keeping our rentals that we currently have (well managed) with the exception of one which we are on the fence about (located away from the others).  It is a duplex that generates about $725 / month cash flow.  Condition is B+ / A- and is in an area that is in high demand with stable tenants.

If we sell this property, we would net about $100,000 thanks to the appreciation and mortgage paydown since we purchased it.  In the area we are moving to, we could purchase rentals (3/2) for $100K each (purchase and light reno).  If we used the $100K, we could buy 4 putting 15% down and have 4 rentals providing cash flow.

The questions:

1) Would you keep the original property that cash flows $725 and have it managed being away from the area or sell it and use the cash to purchase rentals in our intended destination?

2) With a purchase price of under $100K, most lenders shy away from those deals . . . would you look for a lender to buy 4 with 25% down?

3) Open to other suggestions or options?

Thanks, Andy

[Melissa Justice]

@Andy Sabisch,

Great scenario — thanks for laying it out clearly! Here's a breakdown of how to think through each point, especially with an eye on scaling and simplifying as you relocate:

1) Keep vs. Sell the Cash-Flowing Duplex?
$725/month is excellent cash flow, especially in a strong rental area with good tenants. If the management is solid and the property is relatively hassle-free, it might make sense to hold for now, especially if:
- It’s appreciating.
- You can refi later and pull equity.
- You're not maxing out on mortgage limits or time for management.

However, selling could be strategic if your goal is local scale, simpler oversight, and stronger long-term ROI. Using that $100K to buy 4 rentals in a concentrated market (near you) could mean:
- Greater economies of scale.
- Local PM oversight.
- Easier renovations/maintenance.
- Faster snowball effect.

If your long-term vision is lifestyle + scale, then converting one duplex into four rentals might be a smart tradeoff, especially since you're not exiting real estate, just reallocating more intentionally.

2) Lenders + Sub-$100K Properties

You're right — many conventional lenders avoid properties under $100K. Here are a few alternatives:
- Local/regional banks in the area you’re moving to — they often do portfolio loans and are comfortable with these price points.
- DSCR lenders (Debt Service Coverage Ratio) — many will finance these properties if the rent-to-price ratio is strong enough (and it sounds like it is).

Yes, going with 25% down is more lender-friendly and may get you better terms, but it’s not your only route.

3) Other Ideas:
- Consider a 1031 exchange if you want to defer capital gains and roll your duplex sale into 3–4 new builds or fully rehabbed properties — again, turnkey can be helpful here.
- If you're unsure about selling just yet, explore a cash-out refinance on the duplex to fund a couple local deals and hold the asset longer term.

Selling the duplex could unlock significant momentum, especially if you’re relocating and want your portfolio to align with your new life. If you’re planning to be more hands-on or want tighter control, reallocating that equity into 3–4 cash-flowing SFRs in your new market might be the move.

Best of luck,

Melissa Justice

Investment Strategist at Rent to Retirement