Need Advice on Appreciating Unit with Negative Cash Flow

[Patrick Perez]

Greetings BPers,

I have another post outlining my decision to sell my 2/2 condo. A majority of BPers said sell and get another property (in short it was not cash flowing as much as I expected and a few water leaks last few months led to $1500 in damage.)

We put unit on market last week and have an offer for $93k. I purchased for $83k in July of '17. My dilemma is that I will be losing about $2600-$3000 overall after paying closing cost. I put $20060 in closing and down payment when I purchased and will net apprx. $17,393 after selling and paying off note. Standing offer of $93k is the high end of comps, buyer's first offer was $86,500. 

I plan to do a 1031 exchange,so losing more money than I invested is really a set back. 

I ran my numbers again renting it out -I didn't run numbers right when I purchased it...I didn't know about BP yet;)- and here is what things look like if I keep it:

- negative $60/mth cashflow (factoring in vacancy, repairs and cap expenses)

However, since July of '17 this property has appreciated $10k (apprx. $5k/yr.) Sadly, as of now all this current appreciation will be eaten by closing cost plus some.

So,Im looking for any thoughts,advice,input,creative ideas from some more seasoned buy and hold investors. Should I keep the negative cashflow and hope unit keeps appreciating (it is a B class condo in San Antonio) or sell it, take the loss and get back in the game elsewhere?

I do see the plus sides of the property tax deductions and interest deductions,but I was wanting this to cash flow much better. Learning as I grow;)

I have thought about asking my realtor to lower her commission since I would buy my next prop through her. 

Thanks in advance!

Patrick

[Darius Ogloza]

$60 monthly negative cash flow is not a lot when factored in soaking wet (it seems you have factored in all of the relevant intangibles such as vacancies and cap ex).  I do not know the San Antonio market but it seems to me getting a rent raise of $60 in the near future should not be too hard.  Do you have a superior alternative investment earmarked?  if not, I would hold tight and try to improve the numbers unless the tax loss if going to help you this year.  .