cash-out refi / sell / or hold??

[Eric Dubrule]

I own a mixed-use building (free and clear) in the downtown area of a rough city in Mass (2 efficiency apartments over a commercial unit). The building is worth 100k-- at least that's what it would likely appraise for. It cash-flows roughly 10k per year which I'm happy with. The kicker is that the building is in a terrible neighborhood and is surrounded by probably 40% vacant and rundown properties. The area is likely going to continue to decline. The saving grace is that the building is across from a new police station.

I cant decide what to do with the equity in this building. I could cash-out refi for roughly 75k and still cash-flow positive. This would be great to continue on investing in multi's in better areas. I could try to sell, but not sure if there is any market for it. Or I could leave it alone and let it cash-flow-- until I lose the commercial tenant.. then the building breaks even and becomes really difficult/ impossible to sell or lease.

Am I missing any better options for what I could/ should do with the equity in the builing? All thoughts and suggestions welcome!

[Ann Bellamy]

Sorry I'm a couple days late. I'm assuming that the property is in Fitchburg.

Personally, I would sell. But my tolerance and goals are probably far different from yours, as you are probably young and just getting started.

Before you make that decision, talk with others who invest in that area.

@Brian Lucier and Dave Fleckner invest in Fitchburg. Brian is the head of NWCLA. And Worcester Property Owners is at MassLandlords.net for more landlords in Worcester county. Get to know some other property owners in Fitchburg and get a feel for whats going on in the city and how many people are looking to buy in your neighborhood. The answer may become more evident as you get more local knowledge.