Hold or flip....

[Eric Myers]

I just closed on a two family that I purchased for 50% of market value or 50 cents on a dollar if you prefer.

The property is a prime rehab candidate, was owned by an out of the area investor who didn't manage it at all, from what I can gather put anyone and everyone in it and when it got to be too bad it just put it up for sale.

So now I am in there doing the rehab to get the units up and rentable. My thoughts are this, the house is worth 50K according to the town assesor, the real estate agent claims she can get me 70-80K after repairs. The spread between purchase price and sales price makes flipping it rather appealing. especially since it would be a large chunk up front vs trying to collect that much rent over time to acheive that same profit margin, it would take me close to twenty years of renting to achieve that much cash profit from the building that flipping it would do.

The house is in a strong neighborhood, and should draw nice tenants if managed correctly.

What I'm looking for a different perspectives on this option. I know I can always rent it out to cover all expenses and make a profit. that is first and foremost. Second I can sell it and make a profit from it as well so I am good either way.

But the lure of a big paycheck from the flip is very appealing. I guess the thing to consider is what is the capital gains tax on a flip like. Or possibely doing a 1031, and investing into another property again possibley another flip or maybe two more multi unit bldgs... then drawing that equity out as cash in terms of a loan.