Fix duplex or Fix and Flip

3 Replies

I recently had a property put in my lap that I was thinking about fixing and flipping. Here are some quick numbers:

Single family home - 946 sq ft, 2/1, built in ? negotiated price 20k. The last tax appraisal on the property is $6700. Currently in probate. Owner will owner finance with 7k down.

Also, I have found a duplex that needs a little work. Some numbers:

Duplex, both units 2/1, gross monthly income 1100, taxes 1140, insurance 976, tenants pay all utilities. Owners willing to owner finance with 20% down. 78k

Now here's my question or dilemma: I'm closing on my first buy/hold MF property. I've had 2 under contract that fell through within 3 days of closing. I'll save those stories for another day. My business plan has been to acquire a bare minimum of two buy/holds a year. I feel very knowledgeable about the buy/hold strategy and feel very comfortable especially going through the whole process twice before this last property. I've studied intensively for a while now and feel very comfortable with this strategy.

On the other hand I had this SF property put in my lap and I believe ran the exact numbers except only on contractor quotes and not actual pricing but the fix/flip will net 10-15k, but this will be my first time doing it. Since I've been in real estate (about a year and half ago) and read everything I could get my hands on month by month I've been building a team and go to individuals and I defiantly feel like I could do the flip. Where as I feel very comfortable with the buy/hold strategy of acquiring MF properties to create cash flow and purchasing at discount. So this brings me to the question of: should I buy the duplex which needs about 10-15k of renovations or buy the SF and flip the property with the holding cost of 6 month to be safe and renovations +5k of the contractors estimate netting +10-15k. I'm stuck I'm leaning towards acquiring the duplex to make it two MF properties I own then try to creatively finance a flip. HELP experienced BP members with your invaluable advice. Thanks ahead of time!

Also, how much does the tax appraisal mean? I've did some studying on the fix/flip strategy for a few months also I suppose just where I am not as experienced I am nervous. The comps for the fix/flip area from my realtor are $55-65K does the tax appraisal of 6700 mean anything?

I currently was in the same situation between a duplex and a single home. I do closing on the duplex in two weeks. Two incomes always better than one!

@Skylar Dejesus people will tell you that there are no people who are rich that just do fix and flips. It is much better to build wealth through MF units then fix and flips. If you do fix and flips and want to be rich you should own buy/hold rental properties for passive income