Filp or Brrrr advice
Hello Bigger Pockets. Ive been following the form for a bit but Im new to posting. Im a real estate agent here in the south east suburbs of houston and about to start my 2 flip of the year. Im tossing around the idea between flipping and the brrr method and would like some advice. Here are my numbers.
Purchase price $73000, if i go the brrr route i will tile the whole house, fresh paint through out, paint cabnets, 2 new showers and granite through out and other small misc things. My rehab costs are going to be between 16 and 18k, for a total of 91,000 on the high side. I can rent the home for 1400 to 1450 a month. After I refinance, pay taxes, insurance and mortgage I will have have a positive cash flow of roughly 800 to 850 per month. ( i have already got insurance quotes, know what the taxes are and talked to a investment bank for a commercial interest rate, which is roughly prime plus 1. I intend to have everything go through my LLC so I dont have to use my personal debt to income ration, hence the commercial loan. I have not factored in occupicy rate, repair cost after tenate moves in or cost of leasing. The home is in a great area and i dont foresee it being vacant for more than a month.
Option 2 is the Flip. I will tile most of the house, carpet in the bedrooms, paint the whole house and cabinets. 2 new showers, and granite through out. New doors, handles and light fixtures and electrical sockets to give it that new look. Rehab cost, 18 to 20k for a total of 93000 on the high side. I can sell it for between 140 to 145k. closing cost is roughly 10k. Based off these numbers i can net 37000 before taxes on the low side.
Ive been really lucky this year on finding my flips and I know deals like these dont come around that often in my area. My last flip was an easy decision. The rental market wasn't there in that neighborhood and resale was the obvious choice. In this case I feel that both case are equally great. I guess it comes down to my long term goals.
Any advice and why, would be a great help to me.
Thanks