Fix Flip or Hold, Four family, need experienced thoughts

[Christian Beebe]

So our business has mainly been buy and hold larger multi family buildings but we have come across a 4 unit that we can not pass up but need some experience advice on which route to go. Currently we can pick it up for $95k and it needs about $30k in rehab. Part of that rehab is that the units are currently two bedrooms but HUGE so we are turning them into 3 beds AND putting hvac that runs into each unit and sub metering water so that the tenants will pay all utilities. They currently have gorgeous hardwood floors, roof is 15 years old but still in good shape and all the windows need to be replaced. Current rent is $685 for two bed, which is low and going to 3 bed would put the rent around $900 or higher. So NOI with this scenario would be around $31k and current cap rate is around 10.8%. So we could do a fix/flip loan and then rehab and fill with tenants and sell to first time investor or similar for a solid property or we could hold for a year, collect some income and tax incentives/write offs and then refi a year later?

From your experience, which route would be better for a profit plan at the end of the day? Meaning, we don't need immediate cash from a sale if holding it for a year or so would provide a better cash out option down the road but could we get the cash out from a lender based upon the NOI value?

Looking for some avenues and thoughts on ways to think about this or maybe things we are missing.