Should I Flip and Sell or BRRRRR

Question

Hey y’all,

Long time listener first time caller LOL.I have a property we are planning to flip. Bought for 76,500 can sell for 150-160. Needs about 25k to 40k renovation depending on how nice we wanna make it.

I had another investor tell me I’d be better off renting and then doing a cash out refinance. Just looking for advice. This is our 3rd flip. We’ve been averaging about 1 per year and want to step it up to 4 flips this year and start building a rental portfolio at some point in the near future.

Thanks!

Sarah Brown · Answer

Depends on your end goal.  What kind of rental would it be?  What kind of cashflow would you get?  I rarely recommend a cash-out refi.  I prefer to pull a HELOC if I can.  It gives a lot more flexibility.

Jaron Walling · Answer

What is the cash flow? That's the only question that matters. If it's terrible you flip and move on.

Don't forget vacancy, property tax, insurance, maintenance, management, and CapEx

Derek Harris · Answer

Whether a flip or buy and hold is better depends on your long-term objectives. I would run all the numbers and see how much it would actually cash flow. BP's calculators are a great tool for this. Rehab costs will vary considerably depending on if you want to flip it or just rent it out. Just remember that cash out refis are typically capped at 70-75% LTV and typically have higher interest rates.

Me personally, I would do a side-by-side comparison and include all expenses (using conservative numbers). I am in the buy and hold game, but sometimes flips make more sense in order to generate more capital.

Should I Flip and Sell or BRRRRR

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