To flip, or not to flip? I need your guidance.

[Brian Jackson]

So I got my first deal (other than my "house-hacked" home) under contract.  It is 2 separate properties side-by-side.  One house was ravaged by a fire and the plan is to just tear it down and hold the lot (the area is in the beginning stages of revitalization).  The second home is currently split as an awkward duplex, but was originally built as a sfh (3/2).  Keeping it in it's current floor plan won't produce enough rental income to make my numbers work.  The end game is buy and hold but am not opposed to flipping.

The way I see it after running my numbers, I have 2 options from which to choose:

Purchase price - $80000 (LOC @ 5% interest only payments)

Option 1 - Revert the home back to a 3/2. Flip it. Go on my way. ARV is 170-180k. Rehab Cost - 35K (Net Profit 30K)

Option 2 - Same as option 1 but hold the property and rebuild a 2 car garage w/ ADU above. ARV 180-190k. Rehab Cost 50K. Rental Income 20400. (Cash Flow 400+/- per month)

I think both options look attractive for my first deal, however, I guess my question is to what your opinions might be.  Would it be smarter to grow my nest egg quicker or wait for the appreciation (which should probably take about 5 years to be in full swing)?

By the by,  I'll be holding the second plot free & clear after all is said and done.  Very excited for this amazing adventure on which I've embarked!!!