Flip or rent? Analyze my deal

[Zoran M.]

Hi all – I wanted to get the community’s take on this all-cash deal for a multifamily unit. It’s in a very good part of Cleveland, hence the ARV. I plan to get a mortgage after 6-12 months, so my analysis will include those figures: Purchase: $87,000 Reno: $30,000 Initial Investment incl. closing costs: $120,000 ARV based on comps: $200,000 Flip income: $40-50k (Reno would be nicer if I flip it, so rehab would go from $30k to $40-50) Annual figures: Gross Rent: $24,000 ($1,100 up unit / $900 down unit) Vacancy (8%): $2000 Gross Income: $22,000 Taxes: $6,000 Insurance: $1,200 Repairs: $500 (fully rehabbed property) Realtors fee (for tenant placement): $2,000 Total Expenses: $9,700 NOI: $12,300 Mortgage: $7,423 Annual Cash Flow: $4,877 Cash ROI: 4.0% Total ROI: 5.9% I could improve cash flow by $2,000 by placing tenants myself.