Wholesale It or Rent It Out?

[Lamond Sykes]

Newbie investor from St. Louis looking for some advice... I was driving for dollars and came across a FSBO sign. Called him up and he’s asking 32k. ARV is around 34k. Been trying to sell it over 60 days. My max offer is 21k. He currently has a tenant paying $550 a month. Market rate rent in the area is $750. My question is if he accepts the $21k should I flip it to another for $24k-$26k or should I take out a mortgage on the $21k make it my first rental property? If I were to keep it I’d raise the rent to $650. Any thoughts or ideas are appreciated. Thanks!

[Brian Garrett]

Assuming he accepted your offer of $21k I would keep it as a rental.

If the ARV is $34k as you mentioned you could refinance at 75% LTV.

This would give you all of your money back and it will be cash flowing.

That leaves you with zero money in the deal and an infinite ROI.

You then have that $21k free again to buy another property.