How do you decide when to flip vs. hold and refinance?

Question

I've been thinking about this more lately. You get a property bought and renovated, and now you have two pretty different paths: sell it and move the capital into the next deal or hold it as a rental and refinance.

Obviously, the numbers matter, but it's not always as simple as just picking whichever option shows the biggest return.

When you've got a good financial opportunity to do either, what ultimately makes you decide to flip or hold?

Jack Krusinski · Answer

Hi Aiden! For me, it is a combination of where I am at with other deals. Do I have a few good flips coming up that I know will generate some good income, so I rather hold this deal as an investment? Also, it is tenant quality. Is this home in a good area where I can find a good tenant that will stay longer? If so, I am more likely to hold that as a rental versus a flip. If I am on the fence about selling versus keeping it, I will often list it on the market for a few weeks at a higher price, and if I get a good offer, I will take it. If I don't, I will keep it as a rental. Finally, each year I have a goal to keep X amount of rental properties. So if I am ahead or behind on that goal, that factors into whether I want to keep or sell it!

Erik Estrada · Answer

Great post!

I find that a lot of the clients I work with have the intention to either sell or refi however, due to market conditions or change in scope, they have to pivot their entire strategy.

Sometimes it could be for a good reason (higher rental demand) or they are stuck (hard money loan is coming due, property is sitting on the market and cannot sell).

I think each strategy is market dependent. Finding a property that works both ways is ideal, but not guaranteed

How do you decide when to flip vs. hold and refinance?

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