Should I Sale or Should I Rental

Question

Hello

My name is Eddy I'm a General Contractor that's been flipping houses for other people for years, and finally did my own. Now my dilemma is the house is been for sale for a month I know the market is not the same as it was so I'm thinking of refinancing it pull some money out and rent it out until the market gets better or just keep renting it out. I'm just looking for some feedback or advice from some one that's been through this processes. I have another property that I am fixing to rent. So maybe I was thinking I might the same with the first one. Any help would be appreciated.

Thank you for your time

John Patterson · Answer

@Eddy TijerinaHi Eddy, I have a flip I’m about to finish this spring. Have you considered doing a lease -option for your property. This way you can give a nice family a home with a 2 year rent ( or more), the option to buy it afterwards, and you have a nice 5-7% deposit that you keep when signing. They assume all maintenance and repairs while living there. Best of both

Brett Deas · Answer

Will you make money renting the house? or atleast breakeven? If so then why not rent it out. It will save you on holding cost until the market can go back up. If you will keep loosing money then I would do everything you can to get that place sold.

Eddy Tijerina · Answer

Hello Fam I'm Kind of in a bad spot and I need some sujestions and or help to fix it.I'm trying to refi this property but my Fico score is not that good I maxed out my credit cards when I was rehabing this property I originaly wanted to flip it but the way the market is right now and you guys sujesting to refi and hold and running the numbers it seemed like a good idea until I saw what the payments were going to be too high, there would minimal cashflow if any.So my question is. is there any program that can help me get around my fico score or another way I can go about this? Thank you fam for any help that you can provide

Eddy Tijerina · Answer

Hello EricI'm still runing numbers on this but it appears that I might have a buyer. I'm getting all my ducks in a row before I make a decison but it looks like if this sale falls throgh I will rent it out I can pull come money out and still have sufficient cashflow the house is in a great area. Thank you for reaching out your input is highly appreciated.

Eric Fernwood · Answer

Hello @Eddy Tijerina,My recommendation is If the property is situated in a market that has experienced long-term rapid appreciation and rent growth, it is advisable to hold onto it. However, if it is not in such a market, selling and buying in a rapidly appreciating market might be your best option. Will the property have a positive cash flow if you were to pull money out of it? If the property is in a high appreciation and rent growth market, rents will rise, making it a positive cash flow property in the foreseeable future. If the estimated time until positive cash flow is acceptable and you can afford any negative cash flow during this time, then keeping it also makes sense. If the property is not in a high appreciation and rent growth market, and it is unlikely to ever become a positive cash flow property, then selling it is probably your best option.

Kevin Ivey · Answer

Heads up a lot of rental loans have prepayment penalties so you may end up holding it for upto 3 years. If you rented it for a year, & then decide to sell, you have to get the tenants out & then what repairs/ refresh will you have to do to get the property ready to list again? there will be wear & tear! If you want to sell as turnkey rental with tenants in place that will probably be below full market value but less hassles.

Mason Weiss · Answer

Depends on your goal but if you can profit renting the home then I would go that route. If you want your cash again to do another flip or something else than I understand the desire to sell. I would get your numbers squared away first on how much you can rent the property for right now and then make a decision. If you need assistance with this piece let me know.

Eddy Tijerina · Answer

Hey EliottThat'a what I thinking I will contact lenders tomorrow. What's the diffrence between an BRRRR loan and a BRCS loan.

Eliott Elias · Answer

You should be holding rentals anyways. If the numbers look good, you could be able to BRRRR it.

Eddy Tijerina · Answer

Hey BrettYes that's a good option I will start talking to lenders to see where the numbers fall but I think is a good option thank you for your help I will keep you posted on hoe it goes.