Should I unload my property now?

[Aaron W.]

I purchased a 4-unit multifamily last year but the numbers are not working out the way I am expecting. The property cash flows, but CoC is not to my standard (10%+). In hindsight, I bought the property too high and it needs more rehab than I want to put in before refinancing it. The rehab is going to be double expectation because it is an older property. With this increase in rehab costs, when I am able to refinance, then I will still be in the property about $40k of my own money, which is double my max after a refinance.

I am thinking about selling or 1031 exchanging this property into another investment property or opportunity.

Should I:

1. Unload this property now via sale or 1031 exchange and look for a new investment
2. Don't rehab, hold on to it a little longer to collect the cash flow, then sell when buyers and lending are more plentiful
3. Just suck it up and get the rehab done, then refinance
4. Something else

Thanks for your thoughts!

[Theresa Harris]

Is the rehab cosmetic?  I'd do the rehabs as the units become vacant, but make sure you do annual increases in the rent.  Revisit in a few years and sew where you are at.