Im a new, small investor, with a four property portfolio in Lubbock, Tx. Three out of the four are rented out, and one is vacant.
Lately, I've been getting hit with non stop repairs and unexpected expenses, making it extremely difficult to stabilize. Dealing with losses, cash reserves are running thin, and im having a hard time keeping things going financially.
Another concern Im having is that renters are becoming more scarce as we head into the colder months, and im afraid ill be stuck covering a vacancy until the spring. Im trying to avoid panic pricing on rent but at this point, just getting the mortgage covered seems like the easy route.
Im trying to figure out wether I should sell the vacant property to try and create some breathing room. I have about 30k in equity based on an appraisal, but im open to considering more strategies that I may not be thinking of.
For those of you who have invested in Lubbock or have dealt with a rental portfolio going through losses, what have you done to make it through? Id really like to hear from some experienced investors who have made it through similar struggles.
Numbers almost always support lowering rent vs taking 1 month vacancy or 2 months vacancy. Drop it a few hundred and get it rented in the next 30 days.
Hi Jesse, sorry to hear that. I am not an operator, so I'll leave the day-to-day to the folks who've lived it.
I'm a CRE CPA, so just sharing the numbers lens. One thing worth checking before you sell the vacant one: equity isn't proceeds. From a realistic sale price, subtract loan payoff, commission, closing, and buyer-demanded repairs. What's left is your real runway, and it's often well under the headline equity.
Two quick framings if a sale does make sense: the empty unit is the loudest problem but not always the weakest one, so rank all four on rent-to-value and repair trend before picking which to let go. And an occupied unit at breakeven still beats an empty one carrying full cost, so covering the mortgage isn't always panic pricing. (TX note: assessments can be protested. Recurring cost you can actually control.)
You will need to be realistic about your finances and the properties. If one or more of these isn't going to be a viable rental or appreciate nicely avoid sunk cost fallacy. However on the plus side I have had rentals, in strong appreciating areas, that felt like money pits in the early years but settled nicely when the things failing were finally updated so you may be in for a break soon. Best wishes.
Non-stop repairs and unexpected expenses sounds like the units were not properly prepped prior to occupancy or properly inspected at takeover. 3 units should simply not have that much activity. As to the vacancy, post a link so we can see what you are working with.
Sell your primary tax free and move in to the vacant one? (This will also make 1/4th of the future sale of this property close to tax free.)
Otherwise only sell if you plan to give up. No way you pay the selling costs just to buy another property that you could have the same problems with if you inspect it the same pre-closing.
If you don’t plan to give up just push through. A year or two from now you won’t even remember these repairs. I have several properties I swear I’m going to sell when the tenants move out because of the problems. But I simply raise the rent enough to compensate of the hassle and they just pay more. If they ever move out maybe I’ll get to sell. But more likely I’ll have forgotten the hassles I was mad about. An entire bad year shouldn’t affect your investments. Good luck either way.
@Jesse Hubble Four properties can look stable on paper but still create real pressure when repairs and vacancy hit at the same time. Before selling, it helps to evaluate the vacant property based on today’s numbers rather than the appraisal alone.
Start by calculating the true cost of holding it through spring: mortgage, taxes, insurance, utilities, maintenance, and realistic leasing costs. Then compare that with the net cash you would actually receive from a sale after commissions, closing costs, repairs, and any tax impact. The $30,000 in equity may be meaningfully less after those expenses.
It is also worth reviewing whether a modest rent adjustment, stronger marketing, a move-in incentive, or improvements that help the property lease faster could solve the vacancy without permanently lowering the rent. At the same time, look at the entire portfolio property by property. If one unit consistently requires repairs or produces weak cash flow, selling it may be a strategic way to rebuild reserves rather than a panic decision.
The priority is protecting the three occupied properties and avoiding a situation where one vacancy drains the whole portfolio. Selling can be the right move, but only after comparing the net sale proceeds with the cost and risk of holding. A local property manager, CPA, and real estate professional can help pressure-test the assumptions before you decide.
I would see what you can do to shore up cash reserves elsewhere besides the portfolio in your personal life. You need to tighten the belt sometimes and perhaps you over leveraged yourself/did not bring enough cash reserves.
For the vacancy, I’d look to sign a lease that ends during the peak time so you don’t have to worry about vacancy. Theres always people looking for a place so just lower rent to be comparable or slightly below other units.
I would also be looking at if these properties are in good areas and are properties you want to hold onto. The reality is there’s years where properties are not going to perform well and that’s okay because real estate is lumpy. I would also walk each property and unit and see if there’s any foreseeable expenses that you’ll be on the hook for that you know is wrong today or needs to be replaced soon.
Jesse, I would slow down before selling the vacant property, but I also would not keep it simply because you already own it.
The first thing I’d do is look at each property separately and figure out which ones are actually producing cash and which ones are consuming it. If three properties are performing reasonably well and one is consistently requiring capital, that gives you a much better basis for deciding whether the vacant property should be the one you sell.
I’d also be careful with the $30K of equity. I’d want to know how much you would actually net after selling costs, the loan payoff, repairs needed before sale, and taxes. $30K of equity on paper can turn into considerably less cash in your account Before selling, I’d also look at whether the vacant property could be stabilized through a realistic rent reduction, targeted repairs, or a different tenant strategy. But I would not lower the rent simply to keep the property occupied if the resulting cash flow still does not make sense.
There is also a tax piece that is worth looking at before making the decision. Depreciation affects the basis when you sell, and if you have suspended passive losses associated with the property, a qualifying fully taxable disposition of your entire interest can potentially allow those losses to be used.
I’d compare the after tax proceeds from selling against the cash flow you could reasonably expect from stabilizing the property. That should tell you much more than simply asking whether you should keep or sell.
Feel free to DM me, I’d be happy to send over our Turn Key Rental Analyzer and a few resources that may help you look at the portfolio property by property.
For getting the vacant property rented, I have seen good professional photos really make a difference as well as putting it on all platforms that will be helpful for renters seeing it. It's a bit like when someone sees nice photos for a vacation destination or an Airbnb. The photos get them excited about wanting to see the property. Then once the prospective renter is at the property, the property has to deliver. In a lot of markets, Zillow is the most popular advertising platform as it's widely visited and it will populate to other platforms. For other markets there are people who use other platforms so important to analyze what you think will work for your market. Have the property description highlight the most important positives such as if anything is been remodeled, or if there's outdoor space as well as covering the basics of room count and amenities. Also, pricing the property competitively is important.
If the property is in good condition, with good professional photos, priced correctly and it's marketed correctly, most vacancies get filled in 30 days or less. This knowledge is from working in a previous position where I did this type of work for years. I would work to get it rented this month as the rental market in general in November and December slows down considerably.
Hey @Jesse Hubble welcome to BP and congratulations on building a four-property portfolio. The situation you're describing is difficult, but I wouldn't automatically view selling the vacant property as the only solution. With a small portfolio, protecting liquidity and stabilizing the existing assets should probably be the immediate priority.
Before making a sell/no-sell decision, I'd suggest looking at each property individually and asking:
What is the true monthly cash flow after all expenses?
Which properties are consistently consuming cash?
Are the recent repairs one-time events, or is there a recurring maintenance problem?
What would the vacant property realistically rent for today?
How much would it cost to get it rent-ready?
What would you actually net from selling after commissions, closing costs, payoff, and taxes?
If you sold it, how many months of operating reserves would the proceeds provide?
The $30K in equity isn't necessarily $30K of usable cash, so I'd run the actual net-sale proceeds before making that decision.
I'd also be careful about holding out for a particular rent if the property is sitting vacant. Sometimes accepting a slightly lower rent and getting a qualified tenant into the property is financially better than carrying several months of mortgage, taxes, insurance, utilities, and maintenance while waiting for the "right" tenant.
At the same time, I wouldn't panic-price it either. Get several opinions from local property managers or leasing agents about current achievable rent and expected days on market rather than relying solely on online estimates.
From the financing side, there may also be options worth investigating before selling—depending on the properties, equity, debt structure, rental income, and your overall financial position. A refinance, equity-based strategy, or restructuring existing debt may provide breathing room, but I'd only consider additional leverage if the underlying properties are fundamentally sound. Borrowing more money to cover a permanently negative property isn't a solution.
Most importantly, I'd build a simple 12-month property-by-property cash-flow projection before making the decision.
If selling one property gives you enough liquidity to stabilize the other three and creates a healthy reserve, selling may actually be a smart portfolio-management decision—not a failure.
Sometimes the best move for a growing investor isn't owning the maximum number of properties. It's making sure the properties you keep are financially healthy enough to survive the next cycle.
Good luck, and don't make the decision from a place of panic. Run the numbers on keep, sell, refinance, and rent-at-market scenarios side by side. That should make the best path much clearer.
Jesse, sorry you're in the squeeze. Two operator-side thoughts to add to the numbers advice above.
First, the vacancy. Do the math on each empty month against a modest price cut. A month vacant usually costs more than a small reduction spread over a year's lease. Before cutting price, check whether condition, photos, the listing or showing access is the real problem. A fresh set of photos and flexible showing times sometimes does more than a price drop.
Second, the repairs. Constant repairs on three occupied units usually means deferred items are surfacing. Walk each unit, list everything, and sort it into safety, water, systems and cosmetic. Fix the first three on a schedule instead of reacting call by call, and get two bids on anything big.
Then rank all four properties on repair trend and rent before deciding which one, if any, to sell. Happy to talk it through by message if useful.
On the vacant one, are you getting no inquiries, inquiries that don't turn into showings, or showings with no applications? Those are different problems. I look at the same thing with our rental listings before changing anything. How long has it been advertised, and what are people saying after they see it?
With your portfolio, the obvious answer is to get the vacant property leased out as soon as possible, even if it means leasing it out below market. When you have the property overpriced, you end up with all the renters you wouldn't want in the first place, because they can't get into the best-priced units.
I'd like to know more about what types of repairs you're running into. Some of those costs may be avoidable with how your lease is written. A lot of the really good leases I see have the tenant inspect the plumbing system before moving in and acknowledge that no repairs are needed. Then any repairs to the plumbing system going forward are the tenant's responsibility.
I have properties listed all over Texas, and the market is very slow right now. A lot of properties are going well under list price. The good news is that at some point interest rates are going to go down and the property market is going to go back up, but how long it takes before then, we don't know.
@Jesse Hubble Local commercial agent and investor here. Not sure what your management situation is but we have seen a lot of mismanagement that has put owners in really tough situations. Overall the rental market here is strong and stable. Assuming the location and condition align with the price, you shouldn't have too much trouble securing a tenant, no matter what time of year. Always happy to jump on a call or meet in-person (if you are local). Best of luck!
Numbers almost always support lowering rent vs taking 1 month vacancy or 2 months vacancy. Drop it a few hundred and get it rented in the next 30 days.
one thing I dont see in the replies yet. Lubbock is a college town. if the vacant one has 3 or 4 bedrooms id price it by the room before I sold it.
the math is why. I rent houses by the room and mine go $600 to $775 a room in my market. four rooms usually beats what one family pays for the whole house. and its not all or nothing till spring. two rooms filled can cover most of a mortgage while you fill the rest, and spring semester starts in january so people are looking then.
it is more work though. each person on their own lease, you furnish it, and the utilities stay in your name so price that in. id check what rooms near campus go for and what the city allows for unrelated people in one house before spending a dollar.
if it doesnt beat a normal rental by a good bit, selling the one thats bleeding isnt a bad call. 30k of breathing room fixes a lot.
Jesse, I can definitely understand your concern. Having four properties while dealing with unexpected repairs, vacancies, and shrinking cash reserves can put a lot of pressure on your finances.
Before selling the vacant property, I’d take a closer look at your monthly carrying costs, potential rental income, and how much cash you’d actually walk away with after selling expenses.
Another option worth exploring is access to additional business capital. I specialize in helping real estate investors secure business lines of credit, 0% APR business credit cards, business loans, and revenue-based funding when they qualify. The right financing can sometimes help bridge temporary cash flow gaps without forcing you to sell an asset, but you definitely want to avoid taking on more debt if the properties aren't generating enough income to support it.
One question: Is your biggest challenge right now the unexpected repair expenses, or is it the monthly cash flow shortage from having a vacant property?
Hi Jesse, I would put together a weekly cash forecast for the next 8–12 weeks alongside your property-level reports. List the cash available today, rent you realistically expect to collect, mortgage payments, other recurring bills and repairs already committed. That should help distinguish a temporary cash squeeze from an ongoing shortfall and show when you might run out of breathing room. I’d also separate recent one-time repairs from recurring operating costs so those don’t obscure how each property normally performs. Are you currently able to see income and expenses separately for each property, or are you piecing that picture together from bank statements?
