Should I sell my condo that is making cashflow that's appreciated

[Lalaine-Datu Villafuerte]

Hi,

I own 3 condos in, a triplex (pending making it a fiveplex) and recently got into escrow for a SFR but will be converted into fourplex in Southern California.

I am thinking about reverse 1031 exchange on of the condos. The HOA is 302 and I now have a cashflow of 260 per month. I bought it in 2019 and I will have earned 50% ROI. I bought it at 365k and it's now 500k. The other 2 condos have more equity but this one is the least desirable location.

I thought about the 100 per unit that Brandon Turner teaches and the condo is already making cashflow. Should I sell and re-invest in multi- units or keep?

Thank you so much!

Lalaine Villafuerte

[Tyler Hungerford]

Well, do you think you can purchase something with the 1031 exchange money that is in a better area and can provide you with a better cashflow? It does make sense to trade low performing assets for something better. If you can find something in a more desirable area that might not have as much cashflow in the beginning, but it won't have continual reassessments like an HOA does annually or every other year, then it might make sense to go for that other asset. Condos are great if the HOA doesn't get reassessed often, but unfortunately when things are good, they're always looking for ways to spend the reserves on something which means they'll end up raising prices on all the units. Food for thought. At the end of the day, it's a performing asset for you right now. As long as you don't have any huge expenses coming up on it in the next 5ish years, then it might make sense to keep it.