Should I BRRRR or Flip?
Need some guidance here as this will be my first flip or BRRRR. I Have a property under contract for 185k. Repairs are going to cost 47k and take 4-5 weeks. ARV I estimate to be around 300k give or take 10k. I have a private money lender fronting 175k with 2 points and 12% interest only. I'm bringing the rest of the cash and the rehab budget.
I'm not sure on whether or not I should BRRRR this or flip it. I've run an analysis and here's what I came up with BRRRR (pictured below). If I estimate an expense increase of 2% per year, 3% income increase per year and a 4% appreciation value per year, my cash on cash in 5 years is 30% and profit if sold would be 95k. Presently, $129/m cash flow is unattractive, however the 10% cash on cash and possibility of collecting more rent than only $2800 (conservative estimate) is what is making me question my decision to flip. I have an airbnb that is a 2/1 much closer to town that averages $2,500/m, so $3,000+ does seem quite reasonable to me.
OR
If I sold once the rehab is done (rehab completion timeline July 15th), my analysis says I'll have a cash on cash of 17% and collect roughly $44,000 in profit after expenses (also pictured below).
I'm a Realtor and i'm blessed to make multiple 6 figures/year so I don't necessarily need the cash back, but If I get the cash back I could deploy that quickly into another deal, versus if I keep the house and airbnb I won't get that cash back but i'll have a cash flowing asset appreciating in value in a great part of the country.
Any thoughts or direction would be greatly appreciated. Happy Memorial Day!
