Continue w/BRRRR or flip

[Ryan Wilkerson]

Happy Holidays, everyone. Question for the community. Currently in the finishing stages of a property I bought in September to BRRRR, but it looks like I'm going to lose a little money monthly when I do the cash-out refi in a couple months. At today's rates, payment will be roughly $1725-1750/month and top end rent for the area is $1800/month. I'll definitely get all of my investment and money spent on overhead back in the refi, but do I continue forward with the BRRRR, take the small loss each month, and bank on rates eventually coming down some more where I would refi again to bring the payment down OR pivot to flipping it where I'd make, easily, $40-50k net profit AFTER setting aside capital gain taxes? Thanks for your thoughts and suggestions!

Here are the details of the deal:

Purchase price: $100k

Reno: $60k

ARV: $240k (conservatively)

Cash-out refi mortgage: $180k

New payment: $1725-1750/month

Expected rent: $1800/month

Market value to flip: $240-250k

[Jack Mawer]

First off, very impressive that you were able to add value to this asset and be able to sell with a $40-50k profit in such a short period of time in a volatile market. It is up to you if you want to bet on an appreciation play and take the small losses each month with the ultimate goal of refinancing when rates fall and getting to a point where you can cash flow. However, keep in mind other expenses if you decide to keep it like tax, insurance, property management fees, etc. I think that you did a great job on this flip and would be better off making a profit on this one if you are able to sell easily. You can analyze your next deal more so for the back end of things (refinance) and pick an asset where you could see cash flow being probable - you'll also have the cash for a down payment and have some skin in the game! Best of luck.