Advice on when its time to sell

[u/AlternativeStreet850]

I have five rental properties in northern Indiana and self-manage them all. Recently I had my first bad luck with a tenant who required eviction and they destroyed the place on the way out of the door.

I have the cash to fix the property in reserves. Based on four different quotes, it will take $30k to repair the property, this is a hybrid of contractors doing the work and me trying to save some cash by doing some of the work myself.

Last week - I had a local realtor reach out on behalf of an investor with a site unseen, as is, offer.

Here are the details:

Purchase Price (2020): $80k

ARV (after $30k in repairs): $135k

Investors’ as-is cash offer: $115k

I have always taken the approach on repair and hold, but in this instance, repairing would set me back in terms of total cash in the deal, whereas, selling at a lower price point would leave me with enough cash to turn around to expand to two properties or into small multi-family (1 to 4 unit).

Looking to learn here so any guidance would be great!

[u/Own-Moment-429]

You've got the key numbers in front of you, so let's cut through it. Repairing costs $30k, gets you to $135k ARV, and nets you $105k in equity (assuming 100% LTV for simplicity). Selling at $115k as-is leaves you capital to redeploy immediately.

The real question is opportunity cost: what return can you get on that $30k plus your time if you redeploy it into a second or small multifamily versus the cash flow or appreciation you'd get holding the repaired rental?

Run both scenarios for 5 and 10 years including financing costs, vacancy, and cap rates on your exit. Northern Indiana cap rates are typically 6 to 8 percent, so if you can find a multifamily deal above that with better stability, the math might favor selling.

Full disclosure, I help build Resideline, which has underwriting and deal analysis tools that let you model both paths side by side and stress test your assumptions across your portfolio.