First Deal Decisions

[Chad Pore]

Hello All,

So my brother, father and I created an LLC and are in the process of buying our first property. Mostly we plan on buy and hold with the possible flip in there. We have just had our first cash offer accepted! Woohoo.

My question is what may be the best way to decide to rent or flip?

We were able to offer $25k cash quick close, and figure around $10 or less for rehab for rental and probably closer to $15k or more for rehab to sell.

Just trying to see if holding and renting as we look for more property or flip it and use what profit to put towards more properties to start out?

Sorry for the wordy post

Thanks in Advance for any advice.

[Clark Kirkpatrick]

Hey Chad, I'm facing this question with a couple of properties right now myself. My thought is that I look at the cashflow of the property if I rent it, the likely profit on a flip, my long-term goals and my current cash situation.

So if you're going to make $1k/year cashflow from renting it, or you can make $20k now by flipping it, it's probably worth flipping it because 20 years of cashflow now is obviously better. But the numbers could also go the other way.

My long-term goals are mostly related to passive cashflow, not active flipping, so I'm biased toward rentals because of this. Doesn't mean I'll never flip, only that I prefer to buy and hold.

If my current cash situation is really tight and I need the money now, then that'll tip me toward a flip. If I'm doing alright and will be fine without that, and the cashflow numbers on the rental look good, then that'll tip me away from a flip.