Sell vs. Rent SFR flip Im upside down on?

Jules Aton

MD/DC · Member since 2024 · 1k+ posts · 1k+ votes

"If ai refi and rent it, best case I MIGHT get $200-$300 above monthly expenses, worst case I lose $100/month but won’t be able to get any cash out or pay off my credit cards and investor."

If you will be holding credit card and investor debt with only a few hundred a month coming in I don't see how you have any choice except to eat the $22k and sell? Unfortunately sometimes we lose and I'd chalk it up to the cost of tuition.

Cesar S.

Investor · Jersey City, NJ · Member since 2016 · 84 posts · 11 votes

If hard money and credit cards are still outstanding, I’d personally lean toward selling. A $22k loss hurts, but carrying high-cost debt on a thin-margin rental can dig the hole deeper. Resetting, clearing expensive leverage, and redeploying into a stronger deal is often the cleaner long-term move. Those are my two cents.

3 Reply

Dale Robert MasonPro Member

Investor · Member since 2022 · 10 posts · 11 votes

I think the best option is to take the hit and live to fight another day. Maybe the spring selling market will be kind to you and the loss isn't as deep. But in my opinion, the stress of carrying that debt on very thin cash flow is a no go.

James JonesPro Member

Investor · Collierville, TN 38017 · Member since 2017 · 1k+ posts · 695 votes

If you’re relying on appreciation, rent growth, no tax hikes, and no major repairs to make it work, that’s hope, not underwriting.

Here’s the clean way to think about it:

If it rents for only $200 to $300 over expenses best case, that’s razor thin after:

• Vacancy

• Maintenance

• CapEx

• Property management

• Insurance increases in Florida

That $200 cushion can disappear fast.

Now ask yourself this:

Would you buy this deal today at its current value and projected cash flow?

If the answer is no, that’s your answer.

Taking a $22k loss hurts. But trapped capital, stress, and negative cash flow can cost more long term.

If it does not cash flow conservatively today, and you cannot comfortably carry it through a rough 12 months, I would sell, reset, and redeploy stronger.

Cutting a bad flip into a mediocre rental is usually just delaying the pain.

Henry Lazerow

Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes

Real estate tends to go up in value over time. If its break even or close just hold and exit once you can, after the tax write offs it probably is not even really much of a loss. If rates decline more in next year or so we may see prices increase rapidly again across the board.

Caleb Brown

Real Estate Agent · Kansas City · Member since 2018 · 5k+ posts · 3k+ votes

I'd sell. If you could refi and wipe away some of the debts than that'd work. To hold you are losing money monthly when you account for the debts and stress. Either way is a lose lose but it's best to cut the cord and walk then stringing it along

Alex Morales

Member since 2026 · 97 posts · 57 votes

@Charles Soper - Most folks here have given solid advice, and I lean toward the sell side too, but I want to add something specific to your Florida situation that hasn't been fully addressed.

The Space Coast market has some unique dynamics working for it (aerospace growth, tourism spillover), but Florida's insurance crisis is the elephant in the room for any hold strategy right now. You mentioned worrying about insurance and tax increases - that's not paranoia, that's prudent. Brevard County has seen 40-50% insurance premium increases over the past two years, and there's no clear ceiling in sight. That "best case $200-300/mo positive" could easily become negative cash flow with one insurance renewal.

Here's the framework I'd use: What's the opportunity cost of keeping $22k+ tied up in a break-even property for 5-10 years versus deploying that capital into a deal that actually cash flows from day one? You mentioned you have other deals to pursue - that tells me you have deal flow. A clean exit here frees up mental bandwidth, clears the expensive leverage (your investor's money), and lets you reset.

The "hold and wait for appreciation" strategy works best when you can actually afford to wait without stress. Sounds like the carrying costs and debt service are creating pressure. Sometimes the best deal is the one you didn't force yourself to keep.

Mayo GilfurtPro Member

Real Estate Consultant · Connecticut Ct · Member since 2026 · 167 posts · 35 votes

Charles — appreciate you laying out real numbers. This isn’t an “it depends” situation; it’s a capital allocation decision.

If selling frees up ~$20k and mental bandwidth to redeploy into a higher-velocity deal, locking in a known loss can actually be the higher IRR move.

If holding only pencils to breakeven and requires assumptions on appreciation, rent growth, and no surprises, you’re taking risk without being paid for it.

Personally, I keep assets that pay me today. When they don’t, I treat them as inventory, not investments — even in strong markets.

Either path is defensible. The mistake is letting sunk costs make the call.

2 Reply

Tchaka Owen

Real Estate Agent · Merritt Island, FL · Member since 2017 · 986 posts · 1k+ votes

This is an easy decision: sell.

What Alex Morales wrote above is spot on; the only part I disagree with is the insurance issue because a) I believe that will stabilize or go down a sliver this year, and b) if the numbers don't work, they don't work....insurance isn't the only factor. But that's minor, his comment sums the situation up well. You mention that at best you'd get $200-300 above your expenses, is that AFTER you took out reserves? If not, then no at best you'll be losing $100-200/mo.

I'll add this: I live on Merritt Island too and the home in question is in Villa de Palmas which is a desirable area. While the location is good and it's proximate to the KSC, don't let that fool you into thinking it's a good hold. Sell it, take the $20k loss and get the next property. You can have that $20k recouped (and then some) by the end of this summer. Good luck!

ps - while I am still building my contacts, I do have an incredible electrician and a solid plumber (actually 2) all living here on the Island. I'm willing to introduce you if you ever need them.

2 Reply

Frank PyleBusiness Member

Specialist · USA · Member since 2024 · 280 posts · 130 votes

[email protected]317-501-3467

I would probably sell unless the rental is a clear win on paper, because 200 to 300 a month in Florida can get wiped out fast by insurance taxes vacancy or one repair and you still have the investor and credit cards sitting there. Quick check is what is left after you budget vacancy maintenance capex and a realistic insurance number, if it is not at least 300 to 400 a month with reserves you are really just hoping appreciation saves it. If you want a fast way to decide, Investor Edge Concierge can run it through the portfolio analysis and portfolio builder tools so you can see hold vs sell side by side with real assumptions. What is the rent and your full monthly nut all in?

Frank Pyle at ExP Realty

NEXA Lending- Investors Edge Concierge

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Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes

[email protected]248-209-6824

Quote from @Charles Soper:

Flip gone wrong but I’m at the end and looking for options.

Bought a 3/2 about 11 months ago (HML expiring) and through a series of stupid tax lessons I've managed to get done but find myself at a crossroads.

If I sell it and pay off all the credit cards and my investor I take a loss of about $22k. If ai refi and rent it, best case I MIGHT get $200-$300 above monthly expenses, worst case I lose $100/month but won’t be able to get any cash out or pay off my credit cards and investor.

I’ve done a few single family flips and have other rentals so I’m not new to the process but I’m torn about taking the loss vs. holding long term.

Long term I’m counting on appreciation, rent growth, no major insurance or tax increases, or major repairs.

Selling I’m taking a right now loss and walk away with $20k to reinvest in whatever is next.

I know the answer is always “it depends” but I’m curious what others would do.

For reference the property is on a very populated island near Kennedy Space Center in Florida. SpaceX and other commercial space companies have and continue to move in and build so employment in the immediate area should be stable or growing to the foreseeable future.

$200/month postive cashflow divided into $22k = 110 months to break even.
- NOT GOOD! Probably better opportunities.

On the other hand, $22k / 60 months = $367/month AVERAGE positive cashflow needed to break even in 5 years.

What is the probability you can average the $367 with rent appreciation outpacing tax & insurance increases?

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Patricia Steiner

Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes

Geez...I hate this for you. I see a lot of this happening. It's simply not a good time for flipping as most of the country - Florida included - is transitioning (or is already done) to a Buyer's Market. Rents continue to increase in Florida; we need housing to meet demand but insurance and taxes are not going to ever be stable here. I would recommend this: try selling it at the price you need to break-even - and you're going to want to list it by owner to start because you can't afford commissions (not yet). Let it ride for a couple of weeks and gauge interest; it is still tourist season - so all you might need is a major snow storm up north and a tourist who decides 'I'm not going back.' A cash buyer might get you out. But know that if after a few weeks there is little to no interest, you will want to list it and follow the best pricing counsel of an investor focus realtor/broker. The lessons learned in real estate investing are always costly and painful. Mitigate the damage the best you can and learn from it so you don't have to relearn it again. It's not hopeless so just do something and do it quickly. Fingers crossed for you.

Ashish AcharyaBusiness Member

CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes

[email protected]941-914-7779

First, this isn’t a “stupid tax lesson” situation, this is leverage pressure meeting market reality. It happens to experienced investors too.

From a tax standpoint, here’s the clean way to think about it:

If you sell at a $22K loss and it was truly held for resale (a flip), that loss is generally ordinary and can offset other ordinary income. That softens the blow. If it drifted into rental intent, the treatment could differ slightly, but either way the loss has value. Sometimes investors forget to factor the tax impact into the real economic loss.

If you refinance and hold, the small positive cash flow doesn’t solve the real issue, which sounds like balance sheet stress from credit cards and investor obligations. Refinancing may reduce pressure short term, but it doesn’t create liquidity.

When I look at situations like this, I ask one core question:

Are you making this decision based on future upside or based on trying to avoid realizing a loss?

If selling cleans up high-interest debt and resets your capital, that can be strategically powerful. Carrying a thin-margin property while hoping appreciation saves the deal increases risk.

Appreciation is a bonus. Cash flow and liquidity are survival.

Sometimes the best investors take the controlled loss, strengthen the balance sheet, and redeploy with clarity.

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Basit SiddiqiBusiness Member

Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes

5mo

I would just rip off the band-aid and sell the property - Renting the property just delays the inevitable.

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