Should I fix and flip or rent with potential negative Cash Flow?

[Tiago Rodrigues]

I’m am looking to buy my first investment property. I am currently a tenant for a one bedroom, paying 1100 a month. I am good with my hands and will be doing all the renovations myself. My question is, should I invest for a rental property or a fix and flip? Whatever I chose to do I will have to break my lease and then move in until ready to be flipped or rented. I will have friends who will move in with me for $600 a month. Those are some factors that should be known. I am being mentored by a investor and his advice his to renovate it to rent. But looking at all the numbers, if I chose to do that it will be a negative cash flow. To him it’s about the equity and unknown prices of rent increasing. But I don’t want to make a decision based of the unknown. I believe I should fix and flip so that I can afford a 20% down payment on my next investment and from there it will be positive cash flow. Is there ever a good reason to invest in a negative cash flow like he advises?