Weighing a small multifamily hold against a NAV REIT allocation on the numbers, not the nostalgia

You already priced your labor at zero and then used the result to say the building wins. Put a real management fee in at 8% of collections plus turnover coordination and the NOI drops by roughly 6k, which takes your cash flow to about 17.6k and your return on equity under 6%. Now the comparison is a lot closer than the version you posted.

@derekj19 got there first but I'd go further. Add a capex reserve too. A 34k roof amortized over its remaining life plus kitchens plus the appliances and boiler you haven't mentioned is easily 5k a year on a six unit of that age. Reserve it properly and the building is throwing off maybe 12 to 13k on 300k of equity while asking for your Saturdays.

That's the honest side by side. It doesn't decide anything on its own because the building also gives you leverage and inflation-linked rents, and shares don't.

The leverage point is the one I'd hammer. You have 310k of debt at 4.1% on an asset that reprices with rents. Nobody is handing you that again. Sell and you've retired a cheap loan you can't reconstitute, and the REIT's leverage sits inside the fund where you don't control it and can't refinance it.

Roof at 34k against 620k of value is a bit over 5% of value for a component with a 25 year life. That's a normal Tuesday, not a reason to exit.

I don't own any units yet, and the part that stood out isn't the roof. It's four turnovers in six units in one year. Is that normal? Because if that's the steady state, the Saturdays problem isn't going away after the roof gets done.

@bmoreno23 67 percent turnover in a year is high for stabilized multifamily, and it usually points at one of two things: rent under market so people churn upward, or something about the property that makes people leave. Cairn, which is it? Fix that and both the numbers and the Saturdays change, and there may be no decision left to make.

Nobody's said the obvious thing about the other side. If you sell, you don't put 300k into one non-traded REIT and call it done. You'd be swapping a concentrated illiquid asset you control for a diversified illiquid asset you don't, and the repurchase caps mean getting back out is a multi-quarter exercise at best. That's a real reduction in optionality on top of the tax bill. Also the 5.5% you're comparing against is quoted on NAV and part of it is likely return of capital, so it isn't apples to apples with your 7.9%.

The thing an owner is actually tired of is usually one specific task rather than the whole enterprise, and anyone who has run a service business for a few years learns that the hard way. You sourced labor for three turnovers yourself. That is the task. Hire it out and watch the number drop, then see how you feel in twelve months. If you still want out then, you will be selling from a position where the building runs without you, which is also a better building to sell.

The version from @monica_tran3 is cheaper than a sale and reversible, which is worth something on its own.

I'll take the other side because everyone here is talking you into holding.

You have eleven years of depreciation, a 19 year roof, two original kitchens, and knees. The asset is entering the phase where deferred capital comes due in a cluster rather than one item at a time. Whatever the roof costs, assume there's another 40 to 60k behind it over five years, and you'll be spending that out of the 23.6k you thought was cash flow.

Against that, the illiquidity of a NAV REIT costs you nothing if you weren't planning to touch the money, and the underlying sectors doing well right now are ones you personally cannot buy at six units. Nobody's building you a data center allocation on your street.

The part that genuinely counts against selling is the tax, and you've correctly parked that with your CPA. Get the actual number before you argue with anyone here, because a 60k tax bill and a 25k tax bill are different conversations.

@marcus_hale41 is right that the number decides this and you do not have it yet. One more path nobody has raised. You could refinance or take a second position against the equity, fund the roof out of the proceeds, and put the rest wherever the sale proceeds were headed, without triggering the tax event at all. Rates on the new borrowing are nothing like your 4.1%, so run whether the blended cost still clears, and get the current terms in writing from the lender rather than off a rate sheet found online. That gets you diversification and a new roof while keeping the cheap first mortgage in place. It also adds debt service to a building with 67% turnover, which is the part to lose sleep over.