HELP! First flip gone wrong! Do I dump it or rent it??

[Gabe Sirkin]

Hello BP,

Any advice would be greatly appreciated as always! 

Without getting into the nitty gritty, my first flip has gone bad. I can either:

-dump the property, break even (max loss would be $2k) get all my cash out (that I need to live), and move the **** on.

OR

-cash out/refi, get SOME of the cash I have in it out, sign a 2 year lease from a somewhat sketchy tenant (which will more than cover my mortgage), then sell it when they move out, or continue to rent it. 

Problem is I need the money. I'm having trouble finding a good cash/out refinance loan. Its either low LTV with a somewhat sketchy lender, or something more traditional but won't be able to pull the cash I need out of it.

Is getting a 2 year lease netting about $1k over my expenses/month, worth the risk of a sketchy tenant? She owns her own business, so she's having trouble showing me proof of income. said she would sign a 2 year lease. LOVES the house though. Has 4 kids. 

My thought is worse case Scenerio, she bails on me or can't afford rent, then I sell it when theyre out and im in the exact same boat im in now. Or do I just DUMP it and move on from the deal from hell? 

[Bob Okenwa]

I'd look for a better tenant that allowed you to satisfy your debt requirements. If you need money that badly, you may want to consider selling and trying to break even and moving on. Don't throw good money after bad.

I would not do the 2 year lease to someone without proven, steady income. Kids will do what kids do and depending on the age, there will be some wear and tear. That is to be expected with that many children. Just remember, that 1k over expenses only counts when it hits your bank account. If this prospective tenant needs to be evicted within the first few months, can you secure another tenant that will keep the property afloat?