Sell or Hold? Thoughts or advice please

[Edgar Martin]

Hello BP community! I currently have a home in which my initial goal 5 years ago when I purchased was to eventually rent it out. In two months I will have the ability to do so as my wife and I recently purchased a new home. My monthly estimated profit is $300-$400 on the potential rental. I planned on leveraging this amount towards my new home mortgage payment. Then perhaps in a year or two, I'd sell the rental property and then begin flipping homes since I'd have the capital at that time. Home prices in Az are said to appreciate approximately 7 -10% in the next 2 years which is another reason why I'm considering holding onto it. On the contrary, I am very eager and inspired to begin flipping houses and am entertaining the idea of selling now. Do you think it'd be worth it to hold it for at least a year then sell? Or should I sell now and begin my REI journey?

Thank you big in advance!

[Bob Okenwa]

Hi Edgar, 

If that $300-$400 a month is actual cash flow, I'd hold onto it. Hard to get that kind of CF in Phoenix. Another option is to keep an eye on the equity in the home and if it is good enough, get a HELOC on it and keep renting it out and do a flip to pay off the HELOC and get your HELOC funds back and still have your profit left over. I wouldn't bet on appreciation that much as home value can change pretty quickly in 2 years if the economy (local or national) takes a turn for the worse.