Help! Sell or Flip to Rent?

[Rob Cucugliello]

OK so I need some advice. 

In 2018 I bought a fully occupied mixed used building in South Jersey. A 2 bedroom apt upstairs and a day care was operating downstairs. Both occupied and was immediately cash flowing about $1k every month. Life was good. 

In June of 2019, the upstairs unit HWH burst and flooded the day care. Long story short insurance paid for the majority of the damages and even covered a bit of the day care vacancy, but the day care decided to not reopen. After some repairs it unfortunately it's still vacant (Dec 2021) and I have been losing about $550/month on the property.

I have been working on other investments so both my cash and my contractors have been tied up with other jobs. Although I am about to cash out refi one for those projects (a classic BRRRR) and will have a very small chunk of cash ready to use after I pay back some debt - approx $25k.

So I currently have 2 options from here:

1) The old day care could be converted into either a 4 bed 2 bath for about $50k which would bring in at least $2k/month in rent, -OR- 2 units each with 2 bed/1 bath for about $85k, bringing in $1,500/month each for $3k monthly total. I did the math and if you start 'now' then the rehab would be about a 50% cash on cash return. That doesn't include any initial cash investments or water damage rehab already complete. The double 2 bedroom unit would total be about 40% CoC return (again - starting now).  

2) However, I recently just so happen to receive a cash offer from another investor on the table for $200k. This would net me about $75k.

So the dilemma I have is, do I sell which gets me out of losing $550/month plus have $75k in hand, or do I "find" money to convert into either 1 or 2 units and start cash flowing again. 

My personal goal here is to build long term wealth. I currently own 7 properties/9 units - Including the above duplex in discussion. In todays market I don't have a lot of other immediate opportunities to reinvest the cash, but there's got to be something out there, right? Either way, I'm not sure the best move in my current situation. I feel like I wouldn't be able to turn the $75k from selling into a 50% CoC with another property in this market, but hard to tell. Also considering the $75k would be from a sale vs my own cash (or borrowed) does that change how I look at it? I haven't bought anything new since the pandemic. But is there something else I should be looking at? Some other calculation? I've been bouncing back and forth for a while now and need to let the buyer know.

Any input or advice is greatly appreciated - this feels pivotal in my goals and want to make sure I make the best decision.