To Sell or BRRRR my flip property

[Rocco Buccasso]

How's it going BP,

I am wrapping up a flip property that I am partnered on (The partnership is not going as planned and he lacks the necessary motivation, but does have his realtor license... for now). In short, I am looking for some advice as to whether we should sell the property or BRRRR the property as I am playing the long-term game as a young real estate investor. My research says to sell the property, but as I am a buy and hold investor I am struggling with letting the property go (The flip has turned out awesome!). The general rule that I have found is to sell the property if it is greater than 5x the net annual cash flow of the property.

The details are as follows:

Ohio 2 Bed, 1 Bath, small lot, updated mechanicals and modern floor plan and finishes. Purchase price and closing costs ($37,500), Rehab ($20,000), Holding costs ($2,000), Held time (May - August = call it 4.5 months). All in cost is approximately ~ $60,000, with a conservative estimated appraisal value of $75,000 to $80,000. I feel the ARV/sales price is closer to $90,000. I have only held rental income since May 2019, so would still need to hold the property for 1.5 years to be fully seasoned based on my lender requirements of 2 years (I have not yet shopped around for other lenders to date) to refinance and pull my money out of the deal.

I feel there are 3 options:

1.) Sell the property for $90,000, all in cost of $60,000 + realtor fee of $2,700 (only 3% b/c my partner has his license. The will net $27,300, split for the 50/50 partnership will be $13,650 before taxes.

2.) BRRRR: Refinance the property as soon as possible based on the $75,000 estimated appraised value at 75% LTV = $56,250. So we will leave a couple thousand dollars in the deal, and own outright on a 30 year mortgage. The property will net cash flow after the refinance approximately $140 per month, with us self-managing at $750 monthly rent. So the total net cash flow will be $215, split 50/50 $107.50. Over 5 years this would net me $6,450 assuming no rent increased, or big expense changes.

3.) BRRRR and buy my partner out (as he is not fully vested in REI as I would like in a partner): Assume all items from step 2, and then I will pay in $3,650 upfront after the refinance, and then $10,000 over 10 years = $1,000/year with me receiving the full $215 net cash flow/month. This will result in a $1,580 annual net cash flow after buying out my partner. The house is a B property in a C neighborhood, with limited growth expected. I would expect modest appreciation overtime. Over 5 years this would net me $7,900 assuming no rent increased, or big expense changes.

My goal is to grow my portfolio as fast as possible, and eventually get into apartment complex & storage investing. So I think the overall question is do I take the cash up front and re-invest it back into my buy & hold business or hold the property mentioned above long-term?

Any thoughts would be greatly appreciated! Thank you,