Our first FLIP is finished!! But should we BRRRR instead?!

[Rhyetta Musser]

So we just finished our first flip! It's been so much hard work because we've done all of the labor ourselves. 15 weeks of working 6 days a week, 8 hours a day, neglecting home responsibilities, blood, sweat, and tears! I'm disappointed in the list price that two Realtor associates of mine have recommended: under $100,000. Once all is said and done, we should have a "profit" at closing that would barely pay us for our labor. Plus we'll have to pay taxes on the "profit" which doesn't make me happy.

Or we could keep it and do a cash out refinance--the BRRRR strategy. We would get our initial investment back, keep the property and be landlords. The cash flow should be $100/month. Here are the financials of the 2 scenarios:

Purchase price: $20,000

Rehab cost: $41,000

Holding/closing costs: $9,000

ARV: $99,000

"Profit": $29,000 (paying ourselves $15/hour for our labor would take $20,000 of this)

Tax: ? I'm not quite sure but up to $10,000

As a BRRRR, we would refinance with the bank requiring 25% DP. They're offering a 20-year fixed rate loan at 4.5%

If the house appraises for $95,000:

minus $23,750 for the 25% down payment = cash out of $71,250

minus payback for the rehab of $41,000 = $30,250

This would give us our $20,000 back which we used to purchase the property plus $10,250.

What do you all think? 

Here are a few pictures of the finished product. It was a real mess beforehand!