How do I incorporate rehab costs into the 50% Rule?

[Carl M.]

I'm trying to understand the 50% rule when it comes to houses that need work. I think the best thing to do would be to spell out the deal I have now and let people offer their input. I have a single family home under contract. The details are below. Purchase Price: $68,000 Purchase Costs: $ 2235 Rehab Costs: $25,000 Total Costs: $95,235 After Repair Value: $130,000 Projected Monthly Rent: $1300 Refinance $96,000 for 20 years at 5% Monthly Payment: $633.56 50% of $1300 (rent) is $650 650-633.56=$16.44 monthly cash flow Not a good deal at these projections. Now if I get a 30 year mortgage my payment will be $515.35 which gets me a monthly cash flow of $134.65. A little better but not great. I don't think a 30 year mortgage is a good idea for me because I am 47 years old and that doesn't make much sense. So am I doing this right? Based on this it seems my best exit strategy is to flip the property which is what I planned on doing in the first place with a secondary exit strategy to BRRRR this one and possibly sell it in five years. There is a chance I can get $1400 for rent but I prefer to be conservative on my estimates. Any thoughts, input, advice would be much appreciated. We have successfully flipped 9 homes and I am trying to expand my thinking when it comes to creating wealth. I would like to start creating some passive income. Thanks in advance.