Flip or Rent REO in Major City

1 Reply

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

Option #1
- 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).

Option #2
- 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.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here