First investment: Buy and hold or flip?

[Elijah Friedeman]

I'm new to BP and excited to be part of the community!

My situation: I have been learning about REI for a while and recently decided to start actively exploring opportunities. Today a realtor contacted me about an opportunity to pick up an unlisted house for less than $20k (3/1, 998sf). Current tenant will be out in November. House is in good condition, with a relatively new roof--single owner for the last 50+ years. Slight foundation issues, which is normal for the area. HUD would pay $950/mo in rent. The BP calculator said the same. I'm conservatively estimating $700/mo.

I'm going to look at the house tomorrow. If it checks out, I'm planning to pay cash to close quickly.

My REI Goal: I want to create $10k/mo in cash flow so that I can have financial independence.

My question: Several realtors I've talked with think the house could go for $35-40k on the market. What is my best strategy: rent it out or sell it? 

If I kept it, I would likely add $2-4k in improvements, then refinance and pull out the equity to use for other projects. The monthly rent should more than cover that refinance. Or I could quickly sell it and make a nice project to leverage for other projects.

What would you do in my situation?