Flip with Tenant or without?

Question

Hello guys,

I'd like some advise from those that have experience with this type of flipping.

About two months ago I purchased a property from a tax deed auction near Orlando, FL. The rehab is going to be ready in about 10 days.

This is a 2 bedrooms with 1.5 bath really close to two universities (UCF and Full Sail University). I have done a full rehab (new flooring, tiles, appliances, paint, etc).

My main goal with this property would be to flip it after I have placed a tenant there, mostly because I own a property management company and could keep managing the property and turn this into a turnkey investment for the investor.

However, I don't want to be proactive and place a tenant and then find out that this property was much more suited for an owner to live in once everything is brand new.

Some number for you to understand:

ARV: $105.000

Rent: $1.250

Hoa + taxes+ property management + insurance: About $540

Net Income: $711 monthly or 8.14% yearly.

What do you guys think?

James Wise · Answer

Were the sold comps occupied or empty? I suspect that price point is an owner occupied price point. It doesn't look like it's going to stack up as a rental investment at that price. That's what you need to determine & then you'll have your answer.

Braner Dantas · Answer

@James Wise It was based on sold comps on the same condo. Few people bought even a little outdated unit and was able to rent for 1,250 and one got 1,300.

I liked the advise @Frank Wong gave about leveraging my company to help but don't put the tenant in.

Thank you both!

James Wise · Answer

When you are getting your ARV how did you come by it? Where you going solely off of sold comps? I ask this because Its important to know if you are sure that you can get $105,000 for a property renting for $1,250. I know in my market that wouldn't fly. Investor typically pay $80,000 & less for that rent in my market. That may be a number that's only achievable if you go after the owner occupant market.

Frank Wong · Answer

Hi Braner,

I think if your goal is to flip it and move on to the next deal you should sell it without a tenant.  Having tenant will limit your buyer pool and also increase the time length to sell.  Without a tenant, you can market it to owner occupy buyers and investors.

Maybe include verbiage in your marketing that you will help an investor find a tenant should they want this for a investment.  Since you own a property management company this could be easy for you and also get a new client under management.

Maurice D. · Answer

why not keep it?

Flip with Tenant or without?

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