Buy and Hold or Flip a condo?

[Glenn English]

I don’t own any rentals so this would be a first but I’m not sure whether to keep it or flip it. I recently purchased a foreclosed condo in New Hampshire. The tenant hadn’t taken care of the unit so it’s in need of about $9k in repairs which I’m working on. I paid 112,000 in cash + I’ll put in $9K for improvements = $121K.

Rents go for about $1400. There are 12 units in the building, all 2 BR, 1ba. Heat and hot water included in rents. $270 HOA fee. I could cash flow about $400 a month after doing a cash out refi or flip it and net about $10k and find another..I know the smart answer here is probably to hold it, but I'm trying to accumulate some capital so I can continue to invest in flips and eventual more buy and holds. I'd be leaving about $8-10k into the condo and flowing about $400 a month which isn't too bad.

Thoughts?

[Matthew Stanizzi]

I’ll make your choice easy. 

If you need the 10k that bad I’ll be happy to loan it to you. Just give me the 400$/month cash flow for three years.   

Essentially that would put you in the exact same position as selling the property except you’ll be able to collect continued cash flow there after the three years.

Then you do the math and realize that  The deal I offered you is a 26% three year loan.

Hold it.