Hey guys, I have a situation. I bought a condo, which I thought I could flip. My project manager/mentor was advising me on the deal and kept insisting that I should gut and remodel the entire place because its value will increase tremendously. I didn't know much about real estate at the time but I wanted to learn from him because he seemed to know a lot about it, so I thought he could guide me through the process by having me invest in a place and showing me how it is done. I wanted to do minor cosmetic repairs such as changing carpets, painting, and new cabinets (new cabinets were needed), and new appliances because they were needed as well. He convinced me that if I go cheap on the deal, I will get cheap results and thought I should put more into the place.
Well, I had the place gutted and am putting $25K into remodeling the entire condo. I asked my realtor and also a friend who happens to be a realtor to pull comps and do some homework for me. The two realtors do not know each other at all and they both told me that this is a bad investment for a flip because the condos in the area appreciate slowly and they only sell for about 15-25K more than what I originally bought it for after remodeling. The realtor said that I will be lucky if I break even on the place.
Now, I grant that this place will profit over time because it is appreciating nevertheless, and they have a great rental market (most the units are rented and it is a very quiet and secure community). My realtor and the other realtor I consulted both said this is better off as a rental property and I should've done minimal repairs in the place instead of following my mentor's advice and gutting it. The reason I am not willing to lose too much in the front end on remodeling is because my plan is to move to Orlando next year to reinvest and also go to graduate school and I think that this will hold me back financially from being able to make the move to start school in August 2019.
I explained to my mentor that the comps are not promising on this property and that it may not work out as a flip. He is adamant that I should ignore those comps and that that is not a factor in real estate sales. His example was if a dealership has a Hyundai and a Bentley, a buyer is not going to expect to get a Bentley for the price of a Hyundai. He also feels that I need to wait until the job is done and trust him, but according to the two realtors (they know investment properties really well), this is a bad flip. He also feels that I went behind his back by talking to the realtors and searching the numbers. Like I said, I did not know that much about real estate at that time. As I started studying real estate, I realize that this is a rental property and now am regretting doing as much as I am doing to the place. It is already gutted so at best, I can do minimal restoration instead of high quality materials to save some money from loss (this was supposed to be a flip).
What should I do? I'd hate to ruin a longtime friendship over this but things are not looking up and now I'm beginning to feel that if I did it the way I wanted to in the first place, this would've worked out and I would've been in financially ready to get a deal in Orlando by this time. I need to know what the pros would do in such a situation.
