To Rehab or to Wholesale?

[Chris H.]

I have a property under contract for $160k.  I estimate the rehabbed value to be at $300k+, as a fiveplex.

The property is already divisioned as a fiveplex, and is in an area that is supposed to go through some major improvements next year in a plan that the city council passed to improve that neighborhood by making it more walkable and green.  However, this plan is very controversial at the moment with lots of opposition from businesses because it reduces the number of car lanes.  If the plan goes through, I suspect, 2-3 years from now, the property will be worth even more.

However, I'm having a very hard time calculating the total rehab cost.  A couple of the units need a complete overhaul.  There's a structural pillar that has fallen down in the basement (but everything seems ok).  Some of the plumbing is ancient and there's evidence that some parts have had to be repaired already.  There's mixed drywall and plaster.  The house is over 100 years old, older than any rental property I've managed.  All the heat is done by old radiators with a 100 year old radiant heat furnace in the basement coated in asbestos that can't be removed because it's too large.  There's a lot of question marks.  Rehab will probably run somewhere from $40-80k- big range because of all the unknowns.  I'm nervous because it's a bit different from the types of properties I have experience with.  On the other hand, I can take it one unit at a time.

I'm extra nervous because I'm working other deals at the moment that all have hard money loans and I'm worried about being overleveraged.

I put out feelers received an offer to buy the contract from me wholesale at a price that would net me $35k profit.  On the other hand, I strongly feel this neighborhood is going to skyrocket if the city's plans go through (looking likely).

On the one hand, it fits in to my goals of increasing my number of doors- on the other hand, I've been trying to get to 10 conventionally financed properties and a five-plex would require a commercial loan.

What is BP's thoughts- should I close on my contract and finish the property, or sell it to the wholesaler for $35k profit now and reinvest that in to another deal (less hard money, less risk)?