Should I hold or sell?

[Tony Miller]

Hi,
Being a novice, I purchased a condo last spring in Ottawa that currently has a negative cash flow. I am now second guessing the purchase and am wondering if I should hold onto the unit or sell it. I believe I will make some money (not much) if I sell. Additionally, I could find a property with positive cash flow after I sell the condo.

I can`t think of other ways to increase cash flow (parking is already paid for).

It will take roughly 2-3 years before I get into positive cash flow with this property.

Based on what I have read, selling this unit would be the right move.

Any suggestions or tips from more experienced people than me would be appreciated!

...Tony

 

[RebeccaBryan]

How much negative cash flow do you have on the property? How much do you stand to gain by selling it? Do you realize where you made the error purchasing the property?


I`m not sure of the exact situation but if it`s sucking your blood, you`ll likely get discouraged about investing and not move forward. Maybe explaining the situation in detail might get you the answer you need.

I never do negative cash flow properties because I couldn`t afford to do it, however some investors do, but it`s not recommended. I think if you have significant cash flow overall in other properties combined, it might not be bad if you know you can turn it to positive cash flow within a year. With all of our properties put together we have over 2800 cash flow but I still don`t touch negative properties because I think of the cash flow as staying power.

 

[Thomas Beyer]

perhaps re-finance, take $20,000 out, keep $10,000 in the bank to cover negative cash-flow for 3 years IF you are sure it will be better later ..

otherwise: sell !

 

[Tony Miller]

QUOTE (thomasbeyer2000 @ Feb 29 2008, 12:11 AM) perhaps re-finance, take $20,000 out, keep $10,000 in tehbak to cover negative cash-flow for 3 years IF you are sre it will be better later ..

otherwise: sell !


Thanks for the responses! I am happy I asked the question here!

 

[invst4profit]

If it is going to take 2-3 years to get positive cash flow it will then likley take another 2-3 years to make up for your negative cash flow losses. Unless you are speculating on increased value. Assuming you can sell now as you say without losing that is the route I would take before you get hit with unexpected expences. Don`t wait until something bad forces you to sell do it now while you are in control.
Positive cash flow is a necessity for long term staying power