Flipper/Rehabber · North Franklin, CT · Member since 2018 · 7 posts · 0 votes
Did a really nice job on a flip but over spent on some things and ate up some profit. Got he house under contract for 212k me paying 7k closing cost so essentially 205. This leaves me with about 12k in profit for 5 months worth of work where I did most of it myself as a second job. Appraisal came in low at 201k which drops profit to just 8k. I have 50k of my own money in the house in rehab and we borrowed 100% of the purchase from a private investor.
At what point do I just keep this thing, rent it out for about 350-450 a month cash flow after refinancing at 80% of value (161k).
I would then end up with 40k cash from my investment plus I still have another 25k of cash in the bank. So I have enough to do another deal even if I dont sell.
I’m worried about a single family being my first rental though due to there isn’t any other income to back it up if I don’t get paid rent.
Sell it. Don't give up, but improve on the next project.
Unless you're an experienced landlord, this might not be the property for a "first try." Poor tenant selection or bad luck may result in a tenant who doesn't take care of your property. And the hard work that you put into it seems to depreciate.
Properties that I have "flipped" have very different finish levels versus properties that remain as rentals.
Sell it. Don't give up, but improve on the next project.
Unless you're an experienced landlord, this might not be the property for a "first try." Poor tenant selection or bad luck may result in a tenant who doesn't take care of your property. And the hard work that you put into it seems to depreciate.
Properties that I have "flipped" have very different finish levels versus properties that remain as rentals.
Was the appraisal off or was the offer a good one? You can work with the buyer and cut the closing costs, and reduce the sales price, but not both. You could offer to pay for a second appraisal if you are sure the first was low.