BRRRR or flip????????

Question

I purchased a house for $36K last year and i'm deciding whether I want to flip or BRRRR and keep it forever. Its in an A+ area, 3 bed, 2 bath, garage, and outbuilding.

$36K PP, est budget $50-60K, ARV $140-150K.

I could rent in for $1250-$1300 per mo, positive cash flow of around $300 per mo - 20 year note, no property manager, assuming vacancy, capex, maintenance, taxes, insurance and P&I.  Loan of $80K or so.

It probably comes down to what my WHY is?? I want to get out of my Corporate America job and do this full time.

Do I take the lump sum and run or stick to the positive cash flow game?? I'm just trying to see what others in my situation have done, what works, what doesn't.

Thanks!

Drew D

Ashish Acharya · Answer

@Drew Denham

Congrats on those successful flips, that’s definitely no small job, and these numbers look pretty solid at first glance!

From a tax perspective, both options can work, but they’re taxed very differently. If you flip or wholetail, your profit is taxed as ordinary income, so you’ll pay higher rates and possibly self-employment tax.

If you hold and rent, you’ll get depreciation, interest, and expense deductions that can offset rental income and lower your overall tax bill. The key is that your cash flow should stay positive after the refinance. If your PITI is $1,600 and rent is $1,700, it’s tight but workable if you plan to hold long term and benefit from appreciation and tax savings. Like Michael said above, sometimes it's a boring plan, but it works if you strategize and can leave some room for growth.

If short-term cash is your priority, flip it. If long-term wealth and tax efficiency matter more, BRRRR could be smarter.

Good luck running the numbers! Happy to connect.

Jason Chen · Answer

id flip it for the largest amount possible

$300/month could be made from playing around with amazon.com's mechanical turk or working at mcdonalds part time