Fix & Flip or Fix & Hold?

[Deborah Wodell]

Hey everyone,

I’m curious to hear how you decide whether to move forward with a fix-and-flip or hold onto a property for long-term rental income. Sometimes, a deal looks great on paper for a flip, but as you dig deeper, you realize the numbers might not line up as expected. What’s your process for determining if a property should be flipped or turned into a rental instead?

Do you ever change your mind mid-project? How do you pivot if you’ve already started a flip but realize a rental would be more profitable in the long run? I’d love to hear your strategies and any examples of when you’ve successfully adjusted course!

[Jonathan Greene]

You should always run your numbers for both before you offer just in case something goes haywire on one end. Maybe renovation costs get blundered so the spread is too weak, but the appreciation and refi potential is there. Maybe something happens on the block which pushes rental rates down, but still provides a sale option. And yes, sometimes you have to pivot depending on other parts of your portfolio.

The issue is that a flip is higher end finishes and amenities than a long-term rental so you could overdo the market if you have to rent it and get less of a return for the finishes. You sit down and weight the pros of cons in the end. Some people hold it just because they won't make as much as they want, but then the market goes down and they lose more so you to know the sale and rental market as well as the trending nature of the area.