First deal! Should I flip it or hold on to it?

5 Replies

I currently have a 2 family property under contract for $55,000 and it needs about $50,000 in repairs. The ARV is 150,000. I am purchasing the house cash, so I would have the property free and clear. The repair would come from credit cards. Which would leave me max out on my credit card. With no money since I am putting all my savings to purchase it cash. If I rent it I could probably get $750 per unit making about $1500 a month. This would be my first deal. I don't know if I should flip this or hold on to it.

With the information you gave, I would flip the house and move onto the next thing.  The idea being that you've just increased your capital and then you can transition that into another property and either do it again - raising more capital - or buy and hold with hopefully excess leftover.  Personally, I don't like credit card debt.  That's the main basis for my opinion.

@Raquel Arias  

I suggest checking out BiggerPockets Podcast #3.  They specifically talk about credit cards vs other options.  You should check it out.

Here is a link for Podcast #3:  Podcast #3

I would go ahead and sell it/flip after you fix it up.  If you can place tenants in prior to selling, then to me, as a potential buyer it makes it more attractive.  You will also be able to start recouping the cash you put into the place.  If it doesn't sell, you can do a cash out re-fi, get all your money out plus some extra, have a cash flowing property, cash in hand and be ready for your next deal.

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