A rental and a flip: Analysis

[Rebecca Graziano]

I'm under contract on a foreclosure in Texas. Here are the raw numbers:

- Average price for the area is $131,000

-Under contract for $82,500

-conventional financing with 20% down, 5.8% APR

-Average rent is $1100/month

The property definitely needs some repairs, but we didn't find any red flags in the inspection report (needs some electrical work, but panel is ok, roof is ok, foundation is ok). How could we calculate this as a rental and a flip (hold for few years and sell)? I'm getting contractors to provide estimates for the work so I can include in the analysis, but how would I be able to include all the variables in a way that I could identify whether it's worth pursuing or not?

Thanks everyone.