BRRRR vs FLIP Decision?????

[Shane Willis]

I have a deal now that is perfect BRRRR and Good Flip. Having tough time making decisions.

I could BRRRR and even with these higher rates clear $250-$300 a month after refi, with pretty much all my capital back out.

Flip would clear 80-90k. Worst case 70K

Probably wholesale and clear 40-50k

I have at least 5 doors (all SFR) in rentals already, as well as some notes (from owner financing), and some crowd funding as a silent partner.

Mortgage rates changing so quickly it changed this deal drastically as I started working on it last Halloween. 

Thoughts???

[Evan Polaski]

@Shane Willis, first I am a little skeptical on your wholesale vs flip numbers.  Seems a little tight, but I don't know overall cost of project.  i.e. let's say best case you could make $90k on the flip, if you wholesale and make $40k, the implication is the buyer can make $50k.  Not bad if you are talking $100k sale price and $50k renovation.  But if you are talking $500k all in investment, I would guess you would be hard to find an investor.  And that is using your best case flip number.  

Depending on your time and how solid you are on your numbers, I would be a flipper.  But this assumes you have teams available and rehab budget is locked in with full inspections completed.  Otherwise I would be a wholesaler, and remove the "what's-behind-this-wall risk" that comes with a flip.

And overall, rentals over the long term (10+ yrs) don't cash flow.  So unless you are seeing significant appreciation potential beyond the rehab, I would be hesitant to hold.  And if your rehab isn't touching literally every surface and system in the property, you will likely have some big bills coming (roof, HVAC, kitchen and bath, windows, water heater, decks/fences, etc)