I recently purchased a two unit property REO in Baltimore. It needs work, regardless. However, I am really on the fence about whether to flip it or repair for buy and hold. Here are some of the details:
- Two Unit in Good Area, purchased for $45k
- Needs around $50,000k of work to ready two rental units in the same property, which would allow for around $2,000-$2,200 of rent per month (meets 2% rule).
- Needs probably $100,000-$120,000 of work for a flip. House next door sold for $220k, house across street sold for $210k. So, opportunity for profit of around $40k-50k, all told.
Some additional thoughts/factors:
- There are a lot of opportunities for rental properties in Baltimore that would meet the 2% rule, there are fewer opportunities for flips.
- I originally purchased this with intent to rent, light rehab, and I don't have "full flip" experience.
How would the seasoned investors here approach this? I am REALLY torn, but I really need to make a decision on it ASAP. Thanks for any thoughts.
My personal preference would be to buy and hold if the location is on a steady upward swing - I know Baltimore has some tough areas... That being said, if you go that route, you will be able to reap both long term benefits of rental income plus appreciation.
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