Rental Property Investor · Houston, TX · Member since 2019 · 15 posts · 4 votes
I got into a bad deal years ago (with little real estate knowledge), which had created negative cash flow every month. The price of the property in the area has also depreciated and is not expected to up soon. I know better now how to invest and what deals not to get into, but this old deal is draining cash every month. Should I just accept the losses and get out, or stick around, try to make a bit more cash flow (or minimize negative cash flow) and make equity and hope for the best?
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
7y
OK. Let me ask you a question. If you had a car that got terrible gas mileage, and kept breaking down to the point where it was costing you more than you can make in any month, would you:
a - Keep driving the car, filling it with gas, and fixing it when it broke...and having to cover the negative cost every month out of pocket b - Get rid of the car, and get a new one.
Why would you keep the car, an more important...why would you keep this property? Every month you are getting more behind. The more behind you get, the more you have to recover...and the less resources and time you have to do so.
Limit your losses, as of yesterday, and recover them in the next property...that has positive CF.