Sell or hold?

Question

Looking for advice on wether to hold or sell a duplex in Franklin Wisconsin.

duplex: 5/2 currently z estimate = 455k

owe: 384k on the property. We put zero down.

currebt rents are 1850 and 1800 with room to go up this year.

we would like to sell but had thought it would have sold for more than the z estimate... ChatGPT gives it a 540k sell price. but, ChatGPT is usually bias to what I want lol...

looking for advice and thoughts.

thank you.

Abel Curiel · Answer

Hello Phillip and welcome to BiggerPockets!

Zillow and ChatGPT are surprisingly accurate from time to time but not consistently enough for me.

I'd recommend speaking with local agents, some can be found here, to find out what range you're likely to sell for. You can also do independent research to look into comps that are similar to the subject property.Zestimates and ChatGPT likely do not take into account:

- Absorption rate for the specific property type and location- DOM trends, how fast are properties selling now vs. last year, last qtr, etc.- ALL Comps: Off-market sales, Pending MLS sales, active listings, recently sold properties, expired/withdrawn listings, coming soon, temporarily off-market, etc.Lastly, I would take into account all sales expenses before selling. For example, if you owe 384K and it sells for $455K, you'll have $71K before expenses. Factoring 8-10% of sale price for selling expenses (title/attorney, transfer taxes, broker commissions, capital gains taxes, etc.) you might be making $26-37K after its all said and done. If you're currently cashflowing on the property AND you can't find better returns after re-investing the $26-37K net proceeds, I'd say its worth keeping the property.It all depends on your goal... if the property has been a headache to manage/maintain, many owners would be happy to walk away with $30K and regain some peace of mind.

All the best!

Abel

Bryon Andrews · Answer

I would recommend connecting with a local real estate agent who knows your specific market and knows small multifamily very well. Every agent will tell you that they can do small multifamily, but make sure they actually know the space and even better, own small multifamily in your location. Secondly, I am a huge proponent of buying and holding. Sounds like you can make a decent return for putting no money down. What are your goals with selling? Is there a way that you can keep the property and still reach those goals?