Multi-Family building is at very high risk and high cost even though it appears to be good cash flow. It's a wrong perception to view multi-unit as cash flow property without taking the following as consideration:
1) The location is not diversified as mentioned in this posting.
2) Hight Management cost with frequent attention from the owner.
3) High maintenance cost due to over-crowded occupancies and high frequent use/abuse of facilities.
4) High turnover rate. Tenants come and go on frequent basis. It's very costly to change tenants and it eats up the profit easily.
5) High Licensing cost and taxes.It's also additional cost to be compiant with laws, city code and regulation.
I owned some multi-family units in the past. I can definitely feel what you feel. I finally decided to get rid them and adjusted my strategy. I want to share this lesson learnt for your consideration.
My suggestion to this problem is to put this property on the market for sale. Since you have all units occupied, it's good to convince potentials buyers of being interested. I understand that you will take some loss but it's worth it with the following strategy:
1) SFH is the best option for real property investment since it overcomes the most drawbacks mentioned above.
2) SFH is traditionally considered as low cash flow income property. No any more in the recent years of market condition. I made SFH with gross 15%+ cap rate while the traditional SFH gross cap rate was around 5%-7%.
3) Interest rate is so low. The money is "free". Get rid of the property with negative cash flow and buy SFH in diversified locations to balance the risk.
I just mentioned a few points here. I will offer more suggestions as needed.
Good luck!
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