Use I hold and Rent or Flip

[Clayton Ballard]

I came across a good deal today on a property in Baltimore MD in the 21229 area. I got the property for $29,500 cash. It only needs a little lipstick repair; paint and carpeting or refurbish the original hardwood that's in there MAYBE 5k and ready to rent. The area rents $12-1,500. NOW looking at some comps in the area, I see that some properties has recently sold from 80k-119kSo If I put around 25k and fully update the property, it could be a nice flip ARV:95k 36 S Morley Street Baltimore, MD 21229 sold on 7/7/14 for $80,000 (MRIS BA8218641) 112 N Kossuth Street Baltimore, MD 21229 (200SF smaller) sold on 1/13/14 for $119,000 (MRIS BA8174929) 54 N Ellamont Street Baltimore, MD 21229 sold on 6/30/14 for $95,000 So should I hold and RENT or should I FLIP? Thanks in advance CB

[Ned Carey]

I suspect buy and hold is the better choice but not for the reasons other have said.  

Sometimes flipping to build a pile of cash to invest with is a faster way to build the portfolio, than using all your funds to buy 1 rental. 

In your case I think the $119K sale is the outlier. Is your house going to sell at those prices with $25K work? Were the comps you listed renovated with new systems like updated wiring, HVAC and plumbing? You have pulled comps from a several block radius yet I wouldn't expect anywhere near that price on N Abington only 1 block away from N Ellamont. My point is that you might need to do a significant amount more work to get those prices on a flip and that might make it a very tight deal.

I agree go for section 8 but don't be blinded by the higher rents. The most important factor is getting a good tenant. Evictions, turnover and property damage will kill your profits. 

Congratulations on the deal.  Keep us updated on how it goes