First attempted flip

[Amran Musaid]

Hey everyone, 

About 18 months ago I attempted to do my first flip but ended up having to keep it as a rental. I was still new and didn’t know anything about bigger pockets so I totally relied upon my real estate agent. I didn’t do my homework and really didn’t know how to do it. Here is what the deal looks like

Purchase 120k

Rehab 30k

Anticipated ARV at the time of purchase 200k

After completing the rehab which was a real pain since I live in California and the property is in Michigan it was appraised for 150k

I was frustrated and confused because other properties that were within 1 mile of my property were selling at a similar price point even though those properties are by far inferior. After doing a little digging I found out that even the comps that were used for the appraisal were by far inferior because the subject property is a 4 bed 3 bath 1600 sqft on a double lot and the comps that were used were 3 bed 1 bath 1000- 1200 sqft homes with aluminum or vinyl siding. That’s when I discovered that I had pretty much bought the best property within the 1 mile radius that the appraiser used to determine the value. I reluctantly did a cash out refinance at the 150k appraisal so I can pay off my private lender and make him whole and listed it for rent. I listed it for $1600 which at that time was higher then any other property for rent and with 3 days I had over 100 applications. I just recently increased the rent to $1750 and my tenants pay on time every time like clock work. I recently asked that same real estate agent what he thought I would be able to sell the property and he told me 180k even though prices gave gone up since I bought the property. Even though I have a solid tenant I’m thinking about selling it and either buying a couple of those inferior properties or a duplex and increasing my return on equity and get more cash flow. Or could I split the lot up and sell the additional lot and unlock value that way? I’m not sure what to do here and really need your feedback .