Flip or BRRR Need Advice!

[Fernando Ramirez]

Hello

Greenhorn here with great opportunity. 

Have house under contract in Dallas Tx. 

Purchase price $80k(House was in probate for nearly 2yrs. Closing scheduled for this week). Home value is $156k according to appraisal district(I know that is not accurate). Currently has renters paying $800/month(lease expires at the end of May).  

Brick/vinyl siding, slab foundation, built in the 70s, 3/1.5/1, dated in fair condition.  

Originally thought to clean up, paint, and flip. But recently came across BRRR and now unsure of what route to take.

My thoughts:

$85k - purchase +closing costs

$5k - Clean, minor repairs, paint

(HVAC is new, laminate floors in good condition) 

Sell for $140k+/-(profit $50k) or BRRR which would leave me strapped for cash for atleast 6months.

I currently have $50k to my name, a family member will loan me up to $25k, & $5k EM. I will have to scrape some more funds together for closing costs. 

40 yrs old Male, small business owner, with 0 retirement. Primary residence owned free&clear.

Looking for advice from Experienced Persons. 

What would you do? 

Last year did first flip with partner.  Mobile home on 1 acre. Profit was $40k/$20keach

TIA frm Dallas

[Michael Lewis Lee]

Hello Fernando! The one bad thing is the taxes that will normally be higher when doing a fix and flip. With a BRRRR it is usually held for more than 12 months and have a lower tax charge when it is considered passive income. neither will matter if you file a 1031. You could consider the owner financing, or sell as "subject to", or a lease option, and advertise for their sale with "no bank involved" and make more money. You can charge a little more because the buyer may have already been turned down by a bank. Good luck!