Newbie seeking advice on Los Angeles SFR buy and hold or exit?

[Sammy Freeman]

Hello BP,

I am new to the BP site but have listened to about 75% of the BP podcast (which are extremely informative - thank you Josh and Brandon!) My goal is to flip houses and eventually work my way into MFR buy and hold. I have decided to focus on flipping and would like to get my business started ASAP with the cash from my SFR. I don't have experience as a flipper per se, but my SFR in a great area of LA - I have also made lived-in improvements over the past 3 years. There is about 35% equity in the home, it is beautiful, and in a desirable area with multimillion dollar homes - also in a top school district (which is great for LA) but the HUGE downside is that the home sits on a very busy road. The upgrades include new sound reducing windows so the noise isn't too much of an issue. I purchased the home over 3 years ago when the market was depressed though climbing upward. The home sat on the market for about 1 year before I purchased it and I know the previous owner had trouble renting it - but again the market was soft.

As I am ready to start my real estate business I am seeking advice from some BP investor pros on the best option for exit or hold on this property.  Here are the options with pros/cons below.  I look forward to hearing your thoughts and thank you so much in advance for your help.

1).  Hold the property with Cash our refi, 20% of equity to start Real Estate flipping business.  Continue to live in the property (as we love it) and I would then be buying at the top of the market - but maybe a house that isn't on a busy street?  New loan would increase by $600 per month. 

2).  Hold Cash out refi 20% of equity and rent the home.  Although the home is lovely, I worry about the desireablilty of the property for renters since it is on a busy street.  The home was rented short term in the past with about $700 per month profit but the school was the draw for the tenant.  If the market softened the likelihood of rent discount would seems great since the home is on a busy street.  Therefore, rents would range from (-) to break even, to $100 profit per month with new mortgage.

3).  Exit with sale.  We love the house but the market is hot right now.  I am feeling as though we are at the top and worry about a decline.  Would it be best to sell the home pocket 100% of the equity, and move onto another home to live-in flip and also use some of the cash for RE investing? 

Ugh - what to do.  I look forward to hearing your thoughts.  

Thank you!

Sammy