To flip or not to flip

[Gary Black]

Hello BiggerPockets,

I have a house that I purchased for $68K here in Columbia SC a 3/2 one car garage and I have put in about 10k-12k out of pocket for repairs. New flooring, carpet, granite in the kitchen and new solid surface vanity tops in both baths, all new appliances, new paint, new carpet. All the things you would do to flip a house. I funded the house with a HELOC at 4%. My intentions were to flip the house and move on to another. But after looking at the neighborhood and how nice the house is now, I am not sure what to do. I feel like I can rent the house for between $1000 and $1200 per month. But with the upgrades I think I should be able to sell the house for around $135,000. What would you do??? Flip the house or hold it and use it for another equity line to purchase other homes? Any thoughts would be a great help.

[David Faulkner]

I always choose to hold if I'm able. If you can finance out 80% or even 75% of ARV and it still cash flows, and gives you tax shelter, depreciation, mortgage principal pay down, long term appreciation ... I'd do that. Compare that to selling, paying ~10% transaction fees, short term Federal capital gains, state tax, Obamacare tax, etc., and then you have to turn around and do the whole thing over again if you want to make any more money. Nope, I think holding is a superior strategy in most cases.