Sell at a loss or refi and rent?

[Kedian Jimenez]

Hey everyone!

I got a scenario and decision to make. I’m asking for feedback here!

I got a property upstate that we are flipping. The value is estimated around $310k but my business partner wants to sell low at $230k to get out of it. Which will still mean we owe money.

I want to refinance it and short term rent it (Airbnb).

Long story short, The flip took longer than expected and now we had a buyer that backed out last minute. Finances have been tied up into this property and My biz partner wants to sell at a loss. The hard money Loan is due and we owe some people.

The potential for the property is about $4k/mo low and $8k/mo high in short term. What we don’t have is cash to handle the oncoming issues and furnishing since it’s all tied up. Now this is based on the market but it’s the first property I manage outside of the city.

What would you do in this situation:

1. Sell low and start with a clean slate?

2. refi and turn the asset into income producing?

Area link: https://www.airbnb.com/s/634-Eatontown-Road--Port-Jervis--NY--USA/homes?refinement_paths%5B%5D=%2Fhomes&query=634%20Eatontown%20Road%2C%20Port%20Jervis%2C%20NY%2C%20USA&place_id=ChIJY7rQFXI2w4kRw6xdUVJly9Y&adults=5&room_types%5B%5D=Entire%20home%2Fapt&min_bathrooms=2&min_beds=4&allow_override%5B%5D=&s_tag=HA4-PoWn

[Eric M.]

I suspect there is more to the story than the OP indicates. If the flip is done, and it was done right...and the value according to comps is actually 310K, then you don't need to discount that dramatically to get it sold. There would be a price higher than 230K that would be possible.

Either there is a problem with the house you haven't mentioned, or the 310K is wrong. What was the house listed for, and what was the recent contract for and why did the buyer back out?

You need to communicate with the hard money lender. He doesn't want the house or the default. He will be able to give some advice I would think.