Leave 66k in or sale for 107k

[Conte Cuttino]

Hello guys

Reno got costly on this last BRRRR deal. I'm a Buy And Hold type of guy but the sale is calling me after running the numbers. FYI: If I keep I will be sidelined for 8-12 months until I can buy another deal. Selling I save 30k on the Reno budget resting in a 107k sale.

What you guys think Keep a fully renovate home for 66k in a C+/B- area or sell for 107k for the next deal?

KEEP

- Cash Flow: $664

- CoC Return: 12%

- Equity: $175k

- Total Left In Deal: 66k

SALE

107k profit

https://www.biggerpockets.com/brrrr-calc/1809608.pdf?c=17117...

[Jason Wray]

Conte,

If your not happy with the current cash flow and want to avoid the 12 month delay sell now and 1031 into 1-2 more REI's. Waiting does not earn money, time is a valuable commodity.

[Weta Bryant]

Newbie here,

If the refi numbers don’t bring in your comfortable cash flow, then sell and keep it going.  I’m a buy and hold as well but if it doesn’t make dollars…
I also factor if the neighborhood is growing, is anything bringing appreciation.  If it’s stable then rinse repeat. Doing my first few repairs on my third door, 🤞🏽 I can stay on budget. 
Good Luck!

[Jake Baker]

What is your ROI on the sale?

[Thomas Santella]

Quote from @Jason Wray:

Conte,

If your not happy with the current cash flow and want to avoid the 12 month delay sell now and 1031 into 1-2 more REI's. Waiting does not earn money, time is a valuable commodity.

great response. ROE will be higher than your ROI selling rather than holding. Id move the $ into the next deal or two as jason said

[Evan Polaski]

@Conte Cuttino, I am having trouble following you numbers, but if you are making $664/mo in truly free cash flow after all vacancy, capex, maintenance, etc reserves are met, compared to your $107k profit after all commissions and taxes are paid, you are really only making 7.45% on your money.  

So do you sell?  I would ONLY IF there is something out there that can return more than 7.45%.  

But, I am still confused where a refi comes in to play, or doesn't, in your hold scenario.  It seems like if you have $175k of equity in the deal to hold, you can refi out a good amount of money, keep asset, and still get another deal.

[Conte Cuttino]

***Update Here***
Should I keep Or Sale Gut Flip in B- area.

If I sale my new flip best I’ll get is 30k after 9 months.

If I keep as a Long term rental I’ll have to convert the garage into a 1 bed cottage at an additional cost of $35k leaving a total of $107k left in this deal after 70% refi and closing cost.
NOI: $49,536

CoC ROI: 16.57% / CashFlow: $1488/mo

Pro forma cap: 8.26%

Purchase cap: 11.79%

Check out breakdown below 👇🏾 
https://www.biggerpockets.com/analysis/rentals/6c76954e-deb6...