Alright analyzers of Bigger Pockets. This is an interesting one. 

Here are the home details:

North Miami Beach, FL 33162

3 beds 2 baths 1,800 sqft (Lot: 8,300) sqft

We own this home outright - purchased it for around $175 in early 2010's.

Given comps the home is worth around ~300k.

However I just performed an inspection and it wasn't great. After termites, septic, some electrical upgrades they estimated about 10k in fixes. 

Current tenants:

Existing tenants have been there for a long time (3 years) and always pay. I didn't put the lease together (an acquaintance did) and (silly me) don't actually have a copy of the lease, but they pay on time every time. They don't seem to want to move and are not much of a pain with the exception of a more than frequently common septic flush (I do this about  every 6 months and I read it should be once a year). I have also noticed from neighbors that they have 6 cars on the lawn and the driveway. The driveway only fits one car and it's overflowing. They claim only 4 people are in there but I have no way to verify since I live out of state. Basically they're not under the close eye of a responsible landlord.

Current Rent: $1300 (which is way under-performing for the area for sure)

Again, I live out of state (so it's hard for me to keep an eye on it).

I've boiled it to a few options.

Option 1

I have a relative that would probably buy it as is since he want's the opportunity to rehab it for his own family. I could probably get $250k - $270k for it.

Pros: 

- Don't have to deal with fixes or tenants.

- I can reinvest the capital somewhere else.

Cons:

- I lose the cash-flow

Option 2

I can do a fresh start. Evict the current tenants legally, (we're on a month-to-month right now); rehab the place for 20k-30k and then decide to re-rent or sell.

Pros:

- I take best advantage of the properties new value and cash-flow

Cons:

- I wouldn't be on site (since i live out of state) or if I fly over, it would cost a lot to travel there and miss work.

- Risk of spending more money than we should rehabbing it (we haven't done a rehab of this caliber before).

Option 3

I can keep the current tenants and do land-lording the right way. This means new lease, new rules, new rent (I spoke to them about raising rent to $1500 and tenant seemed to show concern about the raise even though they could do it. Enough to make me think they are somewhat barely affording current rent). I would then perform most or some of the fixes that the inspectors quoted. However, many of the cons from option 2 apply to this one:

Pros:

- I keep tenants that have kept me cash-flowing for years and paid rent on time.

Cons:

- I keep tenants that don't seem to take the BEST care of the property (definitely not trash it - but still).

- I would have to do all the fixes from out of state. So risk of spending more money on fixes and/or risk of crappy fixes.

** Added bonus on Option 3, I can put this home under property management. 

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So there you have it BP. Pick an option - maybe modify it a little. Help me out with contacts of the area that can help me out, or even make a completely new Option #4.