My first home was a triplex. Quite large. Each unit is a 3 bed two bath with garage. It's two buildings. One building is a side by side duplex, with a basement/garage. Those units are about 1600 sq ft each. It's 3 stories. The second building is a two story DADU with an attached garage. It's about 1100 sq ft. I bought it in 2017 in a MCOL area for 450K. I refinanced the rate down to 2.25% in 2020.
I moved out after I got married around this time and bought a new house outside of the city. The income has been great. It pulls in around $6500 per month and my mortgage is $2600 per month so there's a lot of profit. I could totally rent the units for more, but they are long term tenants and I just haven't seen the need to increase rents. The city I do live in does have rent control now so this decision has put me in a difficult spot if I ever needed to bring rents up to market.
Anyway, I'm getting tired of managing this place and I'm getting ready to sell it. My wife is frustrated that I never get projects around the house because I'm constantly working at the triplex. I'm getting slightly behind on taxes and our debt is accumulating. I'm just not sure if it's a great decision. I did spend close to 30K remodeling the ADU after I had a tenant move out last summer. I was able to get $2500 per month after the remodel, but after 6 months the tenants wanted out of the lease. Likely because it isn't worth the price. It is in an alley and there is some drug use. I put cameras back there that announce they are recording but the tenants got tired of that. Rents are also softening in the area. The tenants are moving out next Monday and I've decided to leave it vacant so I can list it. I replaced both roofs, and painted both buildings. I plan to list it for 875K.
After I pay back my mortgage loan, HELOC, wife's credit card debt, my credit card debt, commissions, and any capital gains taxes, I will profit about 225K to 275K and we will be debt free with the exception of our primary mortgage.
I think that keeping the triplex, I will still have all of that debt but I believe my return would likely be much exceed anything I can make trying my luck with the S&P etc.. with the 275K. Knowing me, I've never had that much money before, I would want to have some of that in cash to use for vacations etc…. I'm just wondering, am I making a mistake?
Am I making the right investment decision?
byu/alivenotdead1 ininvesting
Posted by alivenotdead1