I mentioned a few months back that I acquired a 6 unit MFH--three residences and three commercial offices.. To recap, I had thought about putting in a laundromat in the commercial space but decided against running another business and decided to convert the commercial space into apartments making it a seven unit building I'm still in the process of finalizing drawings and approvals and am determining the amount of money needed to pull this off. Since the property is commercial, there will be quite a few things that I'll need to do and I'm figuring that I'll need to sink in a several thousand dollars. I've been thinking about getting a construction loan and the ARV will be enough to support it, but I'm cautious about leveraging up too much at this point in the cycle. And besides, once I refi to roll in the construction loan, I'm looking at a higher interest rate than my initial mortgage at 4.75% for seven years. The situation pretty much says raise cash to handle the improvements.

Yesterday morning, I woke up and the thought came in my mind to sell the rooming house to raise the cash. The rooming house was a turnaround situation and I have some decent equity in the place after having owned it for only a short while. It's completely up to code and other than a few cosmetics is ready to go. This would allow me to fund all of this out of pocket and not be excessively leveraged. It's also a good time in the cycle to sell as there is literally no inventory of MF properties in my market and if priced right, it may go quickly.

One thing I should mention as well is that the first and third floors can easily be turned into actual apartments and reduce the number of rooms to 4-5 rather than 8-9. Utilities are already separated by floor so if someone wanted to run it as a semi multi-family they could although max dollars would be gotten from keeping the current set up. I'm meeting the realtor later this week and if I can get my hurdle number, I'm out.

Not sure how many more rooming house stories I'll be telling.

I bought the rooming house as distressed property. It was empty and had been shut down by the city for code violations. I resolved those during the first six months and then brought it back to life. I estimate I will make 2.5 to 3 times over what I paid for the place. I bought it in late 2016.

There's not much more I can do at this point to create any more value. Hence, my thought is to take the money off the table and do the next turn around. Once I turn the new place, it will cash flow similar to the rooming house with less effort. The 7 unit will be a long term hold. I'll be forcing equity there as well.

G,

How about renting the lower level to someone who already knows how and runs a laundromat? Let them deal with permits, plumbing, machine repairs, theft, customers, employees...or be the business partner that supplies the building and the partner supplies the laundry stuff.

A laundry business means daily work so I’m not interested in a job.

My business model is each building must carry it’s own weight, without having to sell something in order to buy.

Profit is the reason to be in business. Is the rooming house bringing in good profit? I keep things that are contributing to my FREEDOM!!! And look for more properties to ADD to my FREEDOM!!!