NEED FAST ADVICE - Keep & Rent or Sell

[Michelle Romano]

Hello Investors - 

I posted this on another forum but want to run by the local market as well.

Need advice on whethr to continue renting or sell. I have a single family property that has been rented since 2010. The property is in Phila 19138 area. Tenants moved out 6/30/17. They were very careless and left the property in a mess. Need to rehab the kitchen, both bathrooms, doors, lighting, paint, exterior, etc. The property needs rehab either way but the cost to rehab depends on keeping or selling. Below are my calculations for each. 

Second problem, I don't have the money to rehab and will need to take out a loan which is not included in my calculations). I also have a HELOC on another property with rehab funding available. I did not have any guidance starting out and made some mistakes and now I am asking for your guidance and advice. If I sell I would like to use the money and learn the right way to buy, fix and flip. I also completed two flips in 2008 and made a profit with a partner who no longer wanted to invest in real estate.

I prefer not to disclose personal information on the public forum but would do so and discuss options privately. Its two weeks since the tenants moved out and need to make a decision ASAP - as time is of the essence.

Apprciate your help and suggestions. Thank you!!

Fix and Sell

ARV:                                  $ 145,000.00

Price or Existing Mtg:        (52,000.00)

Rehab Costs:                      (25,000.00)

Carrying Costs (60 day) -   ( 1,400.00)

Closing Costs 3%:               ( 4,350.00)

Agents Fee 3%                    ( 4,350.00) 

Margin Error 3%                 ( 4,350.00)

                                          $ 53,550.00

Fix and Hold

Rent Monthly                      $ 1,150.00

P & I Only Mtg Payment:      ( 471.78)

Insurance (monthly)             ( 105.00)

Taxes:                                      ( 120.00)

Maintenance:                        ( 150.00)

                                                 $ 303.22

Michelle Romano

[Brad S.]

By the way, don't forget about the other creative options, like Lease Optioning the property. You can even set up the deal, so the Lessee/Optionee agrees to do the fix-up, and you'd also get an option consideration fee upfront, and possibly higher than market rent. That would raise your rental return and reduce your original outlays.