Shafiq Hirani compares selling versus refinancing a multifamily property worth $4.23 million. Refinancing pulls out $317,000 tax-free while keeping future income; selling nets $1.06 million but kills all future gains. He offers three questions to decide: do you want real estate for ten more years, can the property handle more debt, and do you have better uses for the cash.
On the surface, selling wins. $1 million versus $300,000. But look at what is on the other side of the ledger. When you refinance, you keep an asset worth $4.23 million that produces $275,200 a year, and you took out $317,000 tax-free. When you sell, you have $1.06 million and you own nothing. The income stops. The appreciation stops. And you now have $1 million that— so here is how I would think about it. 3 questions. 1, do you want to still be in this business in 10 years? If yes, refinancing keeps you in it. Selling takes you out. 2, can the building carry the new debt comfortably? If the coverage is tight, more debt is a risk, not an opportunity. 3, do you have somewhere better to put the money? If you are selling to buy something stronger, that is a strategy. If you are selling because you are tired of the building, fix the management problem instead of the ownership. Selling puts more cash in your hand today. Refinancing keeps the asset, the income, and the future appreciation, and the cash you take is tax-free. Neither is automatically right, but you should never make this decision without running both sides. If this framed the decision more clearly, like and subscribe. And I want to hear this one in the comments. Have you ever sold a building and regretted it or held one you should have sold? Both lessons are worth sharing. If you are weighing this right now, that is exactly the conversation I have with owners every week. Link below to book a session or scan the code.
