Comparing 2 Very Different Properties

[Michael Needle]

As background, I own 5 rental condo units (in the DC area). Till now I've been more interested in cash flow but understand the power of having equity to tap. My goal has been to move towards rowhomes/SFR to eliminate the HOA expense, but have a potential opportunity that could be worthwhile. I plan to put in 100k cash either way, to include closing costs (so around 80,000 for a downpayment).

Rowhome: Purchase price and repairs will be around 850k and the repairs would bring it to rental standard (it's already livable) but likely wouldn't give more than 25k in immediate equity. It's a 2 unit (top unit and basement). Factoring rent at 10 month (1 month goes to maintenance, 1 month to vacancy) the return is around 600/month or 7.2% annually.

Condo: This would be a gut job. Purchase price is around 220k, looking at 45k in repairs. It would likely be easily sold for 400k based on location. With the same rental factors as above, profit would likely be around 1,200/month or 12.1% annually.

I'm torn as in theory I could do the condo, flip it, then be sitting with 225k after the sale to go back out and buy a similar rowhome. However, anything can happen in the meantime and I could be stuck holding the condo for several years. While this isn't the worst outcome given the potential CoC return, the potential equity returns in the long term by just buying the rowhome gives me pause about being "greedy."

Anyone been in a relatively similar situation? Thoughts? Thank you!