I have a 4-unit (all 2-1) & a 5-unit (mostly studios) which share a driveway & must be sold together (Long Beach). I was going to start fixing it up, paint, maybe roof, etc (it DOES need work) over the next 2 yrs then cash out, suck it up w/ capital gains. But I currently have a downstairs 2-1vacant after 40 yrs, did new windows, & am fixing it up now. Apparently, an upstairs 2-1 is planning on moving out in March or soon, if she can work it out. That unit will need A LOT of work. I am thinking of just finishing Unit # 1, skipping the 2nd unit fix-up & maybe just sell w/ 2 vacancies, listing it as Single Family Home (for owner occupant who might want to choose between up vs down?) AND list it under Multi-Family. Thoughts?

I had a medium sized apartment house that needed work, but was turn-key. Able to rent as is. I listed it online to other investors. Seller (me) to carry back 1st mortgage at a favorable rate. Easy qualification, low down payment and no loan points. I had around 100 responses.

I started with only a 15% down payment. But my asking price was 5% over market. So really a 20% down. Everyone had 15-20% down. Only a small percentage could get a bank loan. My final 3 top offers were 25% down, 10 year pre payment penalty. Loan rate 6-3/4%. Since this was an installment loan, no up front capital gains tax.

Investors inquiring about our duplexes want to buy it for a lower price. They base their offer on full units with high rents or lower their offer.

There is sense to selling to an owner occupant. Financing using the additional income from the property rents, albeit only a percentage of it.

Lori,

I suggest you sell it AS IS NOW. March is THE absolute best time to list a home and homes are moving.

You know what the market is TODAY, no one knows aa year or 2 in the future.

The time you spend fixing will be lost rent adding up to several thousand. Yes buyers will pay a little less for outdated decor but I estimate they will PAY more, even at a reduced price, than you will be LOSING in rent.

I strongly advise against doing any type of seller financing in today's economy. People look good but don't have any money.

Also, the longer you hold props THINGS HAPPEN.

A few months ago I was holding a home, waiting for the painter. Meanwhile the mower threw a rock into the picture window. 60 days to special order and $1800 expense.

Then a storm knocked down a giant tree which FILLED the backyard. $4000.

If I had just sold it with the OK paint job AS IS I would have profited an extra $5800 on the sale!

If you don't want more props consider 1031ing into a DST. That's what I am doing. Asset Protection Inc (apiexchange.com) and Andres at JRW (DST broker) 626-629-0902. He's in Pasedena.

I pay a flat $1250 fee to API for the 1031, roll the full sale amount into DST with Andres, PAY NO TAXES!!!! to IRS or state, and get an auto deposit every month on the 15th for about the same amount for DOING NOTHING as I cleared when doing all the work of LLing.

(Your Cali state taxes are huge! and must be factored into your decision.)

I forgot, and $5000 rent lost while waiting for the window and painter. So holding the home lost me $10,800.

Your multi is more valuable to an investor AS IS. They don't care about finished like paint and flooring. They will do what they want anyway.