Looking for Advice: Sell My First BRRRR‑Style Project or Hold as a Rental?

Question

J Castro · Answer

Congrats on the first deal—that’s a huge milestone, and you’ve clearly added real value already. 👏

You’re in a good position because both options are viable, so it really comes down to your longer-term strategy and risk tolerance.

Many investors who started exactly where you are chose to hold if the numbers work (cash flow + long-term appreciation) and sell only when it unlocks a clearly better opportunity. A simple litmus test: if you wouldn’t buy this property today as a rental at the post-reno value, that’s often a sign to sell.

From a financing perspective, there are also options to tap into that new equity without selling, depending on rents and DSCR—something worth running numbers on before deciding.

You’ve done the hard part already. Now it’s about choosing the path that best supports where you want to be in 3–5 years.

Frank Pyle · Answer

I see this crossroads a lot. The way I’d look at it is simple: if you can refinance and it still cash flows after the real costs (payment, taxes, insurance, vacancy, repairs), I’d lean toward holding it since you already did the hard part forcing the value.

If the refi kills the numbers and you can sell and walk with a clean chunk of cash, rolling that into a small multifamily can speed up your door count.

If you share your expected rent, taxes/insurance, and what you think your new payment will be after refi, I can help you sanity check the hold vs sell math.

Henry Lazerow · Answer

If it cashflows and is in a good area always hold it. If its negative which most deals are at full refi right now then flip it for profit. Make sure count vacancy, capex, etc.

Scott Chilton · Answer

It sounds like you’ve built a lot of value and have multiple options, which is a good problem to have. Here’s a way to think about it:

If you sell, you could free up $60K or so in equity (after closing costs), giving you a nice down payment for a small multifamily. That lets you start building a portfolio faster and potentially increases your cash flow per dollar invested, since multifamilies tend to scale better than single-family homes. The trade-off is giving up future rental income from this property.

If you hold, you lock in a rental with strong cash flow and continue building equity passively. You also get experience as a landlord, which is helpful if your next step is a BRRRR strategy. The downside is slower portfolio growth unless you can leverage this property for future deals.

A practical approach is to run the numbers for both scenarios (project cash flow, appreciation, and your timeline to scale) and compare which aligns with your goals. Personally, many investors in your position choose to sell the single-family once the equity is solid and use that capital to step up into multifamily, because it accelerates growth and income potential.

The key is to make a decision that balances your financial goals with your comfort level managing properties. Either route can work, but knowing your end game will help you choose the path that gets you there faster.

Jaron Walling · Answer

@Anson Fauchier Both options are valid and get the ball rolling but one think stood out to me in your post.

"and personally rent something inexpensive" - Why would you be renting?? If you don't currently own a house that needs to change. If that means selling the investment property, refinancing at the higher ARV, and using the funds to buy a primary residence do it. You need control and stability. Paying rent to someone else is the opposite of that. A primary residence can be an asset if you buy it correctly. Renting - while investing on the side - slows you down long term. Additionally, you can't take advantage of capital gains exclusions ($250k single or $500k married) when you choose to sell. Most people buy/sell like 6 houses in there lifetime.

You need more numbers. The PP, rehab budget, and ARV is important but you need CF, and reserves to keep this thing rolling. I'd run the numbers as a LTR and see what the return is. If the CF isn't $200 per month (or more) with a conservative LTV refinance I'm selling it for a profit, and searching for the next deal. Don't hold negative CF properties.

When I started out I used the same strategy. I completed two live-in flip (BRRRR-type) deals. I lived in both houses for 2-3 years, created equity (the market helped), and took advantage of the code tax mentioned above. The only reason I wouldn't buy a house to live in (before investment properties) would be because my rent was way below market. Maybe that's your situation, maybe not, but if it's the latter I would buy a house ASAP.

Dave Foster · Answer

@Anson Fauchier, You’ve done a great job creating equity in this property, and you’re in a strong position. If you decide to live in it for another year, then sell and potentially take the entire gain tax-free. Assuming you meet the primary residence requirements exclusion of sec 121). which requires you to have lived in the house for 2 out of the 5 years immediately prior to selling.

If you convert it to a BRRRR and operate it that way for a year or two. You may still be able to sell and take advantage of the tax-free gain rules if it continues to qualify as your primary residence for 2 out of the 5 years immediately prior to selling. If there is additional gain left that would be taxed even after that, you. And do a 1031 exchange of the rest. because it also qualifies as investment property.

If it proves to be a strong rental, keep holding it, and then if you choose to sell it in the future, do a 1031 exchange down the line to still defer taxes and reinvest into another investment property.

Kyle Hendricks · Answer

What are the numbers on the deal? Rent, PITI payment, expected cash flow, profit if sold, cash flow expected if you were to sell and buy multifam?

Without more info it is hard to give a meaningful answer. Would love to hear more.

Wale Lawal · Answer

@Anson Fauchier

I believe either way you are in a great position, but I think the choice really boils down to whether you need long term cash flow or liquidity. My experience says that selling only makes sense if rolling that equity into a small multifamily clearly speeds up your next move. Also if the property will rent well and cash flow after expenses, holding it allows you to keep the equity working and builds your portfolio faster over time. I also typically counsel my clients to compare the two figures and select the option that will lead to their next deal with the least amount of risk and friction.

Good luck!

Ebonie Beaco · Answer

Anson you are in a great position, and you’ve done the hardest part by creating real value, which gives you leverage and options. I’ve been in this exact situation myself, both as a real estate investor and a mortgage broker. I started with value add properties and used that same strategy to scale into a 6 unit building in Chicago, and holding rather than selling early worked heavily in my favor. Keeping the property allowed me to lock in the appreciation I created through renovations, establish stable cash flow, take advantage of depreciation, and then leverage that asset to move into multifamily without giving up a strong performing property. That long term hold became a foundation asset rather than just a transaction.

The decision really comes down to your long term strategy. If your goal is to scale quickly into multifamily, selling can make sense if the equity immediately moves you into a stronger deal with better returns. If your goal is long term wealth and stability, holding is powerful. Forced appreciation combined with rental income and leverage over time is how many investors build portfolios. Personally renting something inexpensive while letting the asset work for you is a disciplined move I’ve seen pay off repeatedly. Run the numbers both ways and align the decision with where you want to be five to ten years from now rather than just the next deal.

Aaron Zimmerman · Answer

What would rents be? Can the property cash flow? Is this in an area that you want to hold property?

Looking for Advice: Sell My First BRRRR‑Style Project or Hold as a Rental?

Looking for Advice: Sell My First BRRRR‑Style Project or Hold as a Rental?

Most Popular Reply

12 Replies