Flipper · Miami, FL · Member since 2017 · 4 posts · 0 votes
I bought a Property (Duplex) in Miami (Prime Location) in a Forclousure auction.
Now I finish all the improvements and I don't know if selling the property or renting it and borrow money from the bank in order to grow in the business, I am new in this so I will appreciate your advice.
I bought the property a year ago at 260K I did everything from scratch, Electrical, Plumbing, Mechanical, flors, roof, etc (All with permits). I only kept the shell. I spend 190K so Property + improvements in terms of Investment is 450K the market price for that property if I sell it now will be 650 - 700K
If I rent it, The rent will be around $5000 Monthly (both units). so it will be 60K yearly and the management in terms of maintenance it will be low (Because everything is new).
Here is the question, What considerations I should have in order to decide if I should selll it or rent it and get money form the bank to grow my business??
Wholesaler · Toronto, Ontario · Member since 2016 · 35 posts · 11 votes
9y
Well, I guess the question is do you want to do the landlord thing /property management thing? If the answer is no, then don't think twice, I would sell it. There is no point of doing something that you know you won't enjoy.
If you aren't too sure about that, then I would do the following:
(1) Runs the numbers of the duplex as a rental, and see what your cash flow is / return is monthly and annually and if it makes sense what you goals are
(2) Ask / look around for opportunities that you would invest the money into if you were to leverage the money that you have in the property (by refinancing it). If those opportunities are of interest and the numbers work after refinancing your duplex and would further your financial position then, it makes sense to keep the property and leverage the money for another investment.
At the end of the day, the decision that you have to make is based on your financial goals as well as what your interests are. They should be what guide what makes sense for you.
Wholesaler · Toronto, Ontario · Member since 2016 · 35 posts · 11 votes
9y
Well, I guess the question is do you want to do the landlord thing /property management thing? If the answer is no, then don't think twice, I would sell it. There is no point of doing something that you know you won't enjoy.
If you aren't too sure about that, then I would do the following:
(1) Runs the numbers of the duplex as a rental, and see what your cash flow is / return is monthly and annually and if it makes sense what you goals are
(2) Ask / look around for opportunities that you would invest the money into if you were to leverage the money that you have in the property (by refinancing it). If those opportunities are of interest and the numbers work after refinancing your duplex and would further your financial position then, it makes sense to keep the property and leverage the money for another investment.
At the end of the day, the decision that you have to make is based on your financial goals as well as what your interests are. They should be what guide what makes sense for you.
If you can pull out the equity and still cash flow positive it is worth considering keeping it. If not then you should sell. Personally I do not like owning rentals worth that much money.
My guess with a value of 650K it's a little tight with rent at $5000 but it might work.
I would sell to access the cash and invest in another flip.
Architect · Philadelphia · Member since 2014 · 27 posts · 9 votes
9y
@Tomas F. if you don't mind me asking how did you finance this flip? Was it a traditional loan? Also how did you finance the cost of the rehab. I know a lot of buildings in the wynwood area require a lot of work in order to turn a profit. Coming up with the cash to fix and getting a decent return on a developing area would be very hard, don't you think?
Flipper · Miami, FL · Member since 2017 · 4 posts · 0 votes
9y
It was all cash. It is in the Rods area near coral Way av. The question now is if I should keep it and rent it or just go again to smaller size duplex near alappatha and Little Habana were I usually buy.
Ponchatoula, LA · Member since 2017 · 37 posts · 11 votes
9y
I'm a rookie but if I were you I would definitely rent it out. If you took 75% out of the property that would give you 487k if it is worth 650K. That's 30k over the total cash investment you have in it. And if you're getting 5k a month in rent, you would have roughly 2k in cash flow after P&I. And like you said your maintenance would be low due to the massive rehab you did (I would still budget for repairs).