Do I flip or try to BRRR?

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I bought my first house last december. I did it because I had an itch to buy my first house. Im only 25yo. The house I bought was under market. The owners were out of the country, its been a rental for 10 years and they were trying to sell. We were the only bid and they went from 315 all the way down to 282 in 2 weeks. The day I bought the house was worth more.

Long story short I only put 3% down into it- no PMI. My mortage is 1720. I have 2 roommates that pay for about 1k of it. The house has 5 bed rooms total. The problem with the house is that it has a huge lot. At the time I bought this for my self. Now I am way into real estate and realize emotional attachments wont get me anywhere.

Well I tried to refi but got declined. My house was just appraised a month ago at 340k. The house is dated inside from the 1990s. Its super nice and its a open floor plan and multi level as well. The kitchen is dated, and all of the bathrooms. Not only that it has a HUGE 2 wooden decks that need to be restained again. Plus it has a 2 story shed in the back that ceiling is too short to make it a rental sadly. The neighbhorhood its in is in a sought out town that they are almost full with building. maybe 5 more years and theyll be done. Not just that but theres a giant mining pit that you cant see but near by that may be turned into a lake in the next 10 years. Been talk for over 20 years. This town is over 2.5x the states income aswell. 

I am trying to decide if I should rent out each room out or flip. I wont be able to make enough off of the rent if I rent to a family. Renting by the roof is the only way to do it. If I refinish the kitchen, all the bathrooms, the patio, and all of the other little stuff and touch up the property cosmetically. I think I can get close to 400k maybe. If I did would it be best to do a cash out refi or sell it? Thoughts?

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Originally posted by @Jerry Padilla:

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I would consider fixing it up while living there and renting out the rooms. This way it doesn't sit vacant if you decide to flip down the road. When it is all fixed up, figure out if it is a place that you want to stay living in for awhile and then cash out refinance - you can get up to 80% LTV on a primary Single family. But, if you were denied for a refinance, how are you going to get approved for the cash out refinance?

If not, then sell it for the profit and find another place that you can rent rooms out of and maybe fix up. You can use that profit to purchase more rentals if you choose too. It all depends on what your goals are. People invest in rentals all different ways, based on what works for them. 

I was denied because for the loan i need to be in the house for a year and its been 9 months now. Ill fix everything up and then ill see what it appraises for next year. If its 400 + ill decide if ill sell or cash out refi. If I rent out the remainder rooms even under market ill live for free. SO either way should be good.