Renting out or flip and sell

[Sergiu Spinu]

Hello everyone

I have a property witch I'm renting out(800$)per month,the lease expire soon,after the lease expire i think to do some cosmetic work and sell it...witch i can buy 2-3 property.....

Do you think its a good idea or i should renew the lease>????thank you everyone for advice..

[Jon Holdman]

If your goal is cash flow, and you can turn $22K into $82K doing a fix and flip, I'd stick to the fix and flip business! Even if you put $20K into fixing this up you'll net something like $20K after costs and taxes. Your $50K kitty is now $70K. Do this twice more and you'll be over $100K and able to do two at once. Do six more, which you can now do in the same time as these first three and you're over $200K and able to do four at once. Keep it up and keep reinvesting the cash and you'll have enough to start making loans to other rehabbers. You'll have the knowledge to evaluate their deals and the ability to deal with a house if you have to take one back. If you accumulate a million and get 12% returns, you're making $10K a month, pre-tax. Call it $6500 a month after taxes. A good rental might net $100 a month, and the favorable tax treatment means you keep a lot of that $100. So, your nest egg in hard money loans is equal to about 65 rental units. And a LOT less work!