Hi My Biggerpocketers!
My partner and I just signed contract for the first house that we're going to fix up, here's the simple breakdown
Purchase price: 325k
ARV : 460-490k
Monthly Holding cost (Tax, insurance, Maintenance, no mortgage) : 1100
Rehab is 1 month, but if we flip and sell, I'd like to sell it around spring time so we could get as much profit during this time. So holding time around 4-5 months.
The average rental in the area is $2600-$3100
We are still open for any suggestions, we could do BRRRR way, but not sure I want to be a landlord and is it worth paying a property manager?
I appreciate the help and any inputs.
There is no right or wrong answer. Do you need all the cash out of the property to buy your next property? Does just 80% of ARV provided enough cash to buy your next property? Does leasing it out making a solid yearly return? Do you know a good property management company that you want to use? Does selling or holding the property help you reach your goals?
Answer those questions and you will answer your own question.
If you are are curious about rental use the calculator to give you that answer. I would personally flip it since from the rough numbers it looks like that would work best
@Jon Reed thank you for replying my questions,
80% ARV: is about 368k and yes, at this time, it'll be enough to get my next deal
rental 2800/month would be around 33k would be 10% cash on cash return
Property Management: I dont know any reputable ones but I can find out from a friend who has their own rental on who the handyman.
So, I was thinking alot about the strategy on buy and hold vs flipping it, so yeah... im leaning toward buy and hold more than just flip it.
thank you again for the insights
Do you use an LLC ? and do you use 1031 exchange for the proceed? what type of Tax deferment vehicle do you use for this? and how do you get paid after the sale?