Pay off debt or get a condo rental

1 Reply

To date I have flipped raw land and purchased/demo'ed and starting on one of 3 spec homes on my lot.  After each build I stand the realistically make $100-$125k per. (Based on exact comps 30ft from my lot & values are growing)

While starting the 1st build I found a condo that I'm very interested in as a buy and hold rental (great location and decent price).

I want to find a backer (which I might have) secure funding and make a cash offer which would cost around $55-$60k to own ought right and include closing etc. and pay it back upon the close of the 1st build.

 This condo would be at the 1.95% rule cash flowing app. $350-$400 per month (IF there's no monthly payment!).  That results in just under an 8% return annually (unless unexpected expenses arise-which they tend too).

My business partner suggests I wait, hold onto the cash from the sale to try and by another tear down in the area to build 3 more houses (which do pay handsomely WHEN they sale!).   I'm ready to try my hand at being a landlord.

Open to suggestions:  is it smarted to wait and try and grow the spec home aspect as they are proving to be very profitable and our market is on fire.



The answer to your question may be simple and I really think it's one that only you can answer, because only you know your risk tolerance, and only you can determine what your investment goals are.

It may get simpler than that.  If you're not worried about risk, then simply run the numbers and whatever gives you a greater return on your investment then it's a easy decision.

Good Luck!

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