Own a 4 unit ,cap rate 20% should I sell? Im 24y/o

Multi-Family and Apartment Investing
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Own a 4 unit ,cap rate 20% should I sell? Im 24y/o

Andres Prince
Real Estate Agent · Chicago, IL · Member since 2017 · 2 posts · 1 vote

Hi,I’m 24y/o ,I own a 4 unit that gives me a cap rate of 20% ,equity at the moment 130k ,should I sell and make a flip? Or keep it (can’t refinance bc of a recent bankruptcy)

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Oleg Shalumov
Rental Property Investor · Teaneck, NJ · Member since 2016 · 567 posts · 291 votes
7y

@Andres Prince what would you do with the money if you sell the property? 

If you have a profitable investment in mind then sell. If you do not have anything to invest in, then hold. 

4Reply
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  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    7y

    Hi Andres,

    You have a 20% CAP Rate?

    What's going on with cash flow?

    And it's 4 units, what about comparables?

    ....

    0Reply
  • Oleg Shalumov
    Rental Property Investor · Teaneck, NJ · Member since 2016 · 567 posts · 291 votes
    7y

    @Andres Prince what would you do with the money if you sell the property? 

    If you have a profitable investment in mind then sell. If you do not have anything to invest in, then hold. 

    4Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    7y

    You can sell, refi or just stay put. You need to understand your goals and what each strategy would do for you in helping you reach those goals. Sell if you want to grow your portfolio and have a place to put the profits. Hold if you you want long term cash flow. 

    1Reply
  • Jacob Murphy
    Contractor · Cincinnati, OH · Member since 2015 · 92 posts · 75 votes
    7y

    Sounds like you have an amazing property, I would hold on to that puppy as long as I could unless there is a much larger multi unit property you are going to 1031 exchange to. And even then I would only do it if it is an off market property that you absolutely know you can close on without competition from other buyers.

    0Reply
  • Greg Scully
    Rental Property Investor · Johnson City TN · Member since 2016 · 386 posts · 271 votes
    7y

    @Andres Prince - Cash flow is great to keep the lights on and fund your pursuit of other deals, however 100K can go a long way towards a larger purpose.  Define what your goals are and do a pro/con list based on selling or keeping.  Sounds like a good problem to have.

    0Reply
  • Nicholas B.
    Las Vegas, NV · Member since 2011 · 42 posts · 17 votes
    7y

    If you can't refinance then you can't finance a new purchase and would be limited to all cash on a new purchase unless you went hard money. I would vote for keeping it.

    1Reply
  • Brent Coombs
    Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    7y

    @Andres Prince, if you cashed out now, does your past financial decision-making augur well for your future decision-making? [You get why I'm asking, right?]

    I suspect: patience is your friend, rather than the lure of quick cash.

    ie. I also vote: keep it! Welcome to BP. Good luck...

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    Based on my past experiences dealing with inexperienced investors it is impossible to advise with the limited amount of information you have provided. In most cases their nimbers are so inaccurate that advice would never be reliable. 

    Is it possible for you to provide a more detailed breakdown of your numbers. 

    1Reply
  • Frank Wong
    Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
    7y

    A true 20 Cap and sell. WHY?  Free money if it's real.

    0Reply
  • David Smith
    Rental Property Investor · NJ/PA · Member since 2016 · 555 posts · 149 votes
    7y

    Sell at a high price.  If no one buys, just keep it.   Nothing to lose. 

    0Reply
  • Nicholas B.
    Las Vegas, NV · Member since 2011 · 42 posts · 17 votes
    7y
    Because you wouldn't be selling at a 20 cap :) 

    Originally posted by @Frank Wong:

    A true 20 Cap and sell. WHY?  Free money if it's real.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    20% cap rate? So you own the riskiest piece of real estate in the country?

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    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    "20% cap rate? So you own the riskiest piece of real estate in the country?"

    Something does not add up which is why I was hoping he would provide financial details.

    It appears he has gone dark.

    0Reply
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