Flip or hold? In a massive limbo

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Flip or hold? In a massive limbo

Pedro Paz
Member since 2022 · 3 posts · 0 votes

We bought a property in the DC area initially as a flip. But through the process, we met a local property manager who analyzed our property and gave us numbers in income. So we decided to go that route as a short term rental. We’re now just thinking is it worth the hassle long term since interest rates ar so high as our mortgage will be quite high. Or should we just hold it for a couple years until we can refinance and then grow our cash flow. As it stands, here’s what we’re projecting:

Profit if we sell: 60-115k

Rent if we hold: $400-1,000 p month in profit 

Anyone have any advice? We’re young and want to hold long term but aren’t sure if we should take advantage of the market and take our high profits as is. Would appreciate any insight!!

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    3y
    Quote from @Pedro Paz:

    We bought a property in the DC area initially as a flip. But through the process, we met a local property manager who analyzed our property and gave us numbers in income. So we decided to go that route as a short term rental. We’re now just thinking is it worth the hassle long term since interest rates ar so high as our mortgage will be quite high. Or should we just hold it for a couple years until we can refinance and then grow our cash flow. As it stands, here’s what we’re projecting:

    Profit if we sell: 60-115k

    Rent if we hold: $400-1,000 p month in profit 

    Anyone have any advice? We’re young and want to hold long term but aren’t sure if we should take advantage of the market and take our high profits as is. Would appreciate any insight!!


     You know you're limited to 90 days per year as a short term rental in DC?

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  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    3y
    Quote from @Pedro Paz:

    We bought a property in the DC area initially as a flip. But through the process, we met a local property manager who analyzed our property and gave us numbers in income. So we decided to go that route as a short term rental. We’re now just thinking is it worth the hassle long term since interest rates ar so high as our mortgage will be quite high. Or should we just hold it for a couple years until we can refinance and then grow our cash flow. As it stands, here’s what we’re projecting:

    Profit if we sell: 60-115k

    Rent if we hold: $400-1,000 p month in profit 

    Anyone have any advice? We’re young and want to hold long term but aren’t sure if we should take advantage of the market and take our high profits as is. Would appreciate any insight!!


     You can’t do str on non-owner occupied in dc, I’d imagine it won’t cash flow with the rates today, if you can make 100k in this market, take it!

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  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    3y

    @Pedro Paz Your strategy is all over the place and the profit or cash-flow isn't narrow. These numbers don't feel confident. 

    I would continue as flip which you originally aimed for. Sell, make some money, learn, and look for the next opportunity.  

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  • Pedro Paz
    OP
    Member since 2022 · 3 posts · 0 votes
    3y
    DC AREA not DC
    Quote from @Russell Brazil:
    Quote from @Pedro Paz:

    We bought a property in the DC area initially as a flip. But through the process, we met a local property manager who analyzed our property and gave us numbers in income. So we decided to go that route as a short term rental. We’re now just thinking is it worth the hassle long term since interest rates ar so high as our mortgage will be quite high. Or should we just hold it for a couple years until we can refinance and then grow our cash flow. As it stands, here’s what we’re projecting:

    Profit if we sell: 60-115k

    Rent if we hold: $400-1,000 p month in profit 

    Anyone have any advice? We’re young and want to hold long term but aren’t sure if we should take advantage of the market and take our high profits as is. Would appreciate any insight!!


     You know you're limited to 90 days per year as a short term rental in DC?

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  • Pedro Paz
    OP
    Member since 2022 · 3 posts · 0 votes
    3y

    Not at all Jaron… my goal is to hold one/flip one. But I also realize that every deal is unique. So this one I’m specifically trying to weigh the long play with the short play. The biggest hold up to me is the short term rental and the challenge of predicting how much it will bring in in rent. Should have mentioned that with the refinance I’ll only have 30k or so in the deal. So all things considered it’s pretty cheap to hold. 

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  • Charles DeLong
    Member since 2023 · 4 posts · 0 votes
    3y

    I would reccomend a hold in this situation. The cash flow sounds pretty good considering where rates and payments are. Also when rates come back down you will have 2 solid options... Refi or sell at likely a higher price due to low inventory AND lower rates. Many economic indicators are showing rates to be in the low 6s or high 5s by Q2/3 of 2024. 

    Long term holds are usually the least risk IMO! Ive done both holds and flips.... My hold property is work 300k more than what i bought it for and my best flip i made 176k off...

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