To Sell or To Hold, What would a seasoned pro do?

[Jordan Amarant]

Bigger Pockets has become a top resouce for my novice RE investing career and the amount of knowledge in one place is awesome! Which is exactly my reason for this post.
I recently completed renovations on a distressed SFR short sale in Modesto, Ca and have had it listed for just over 30 days now with no offers, which tells me I am over priced and either need to drop the price again or hold onto it as a rental. Numbers on the property look like this:

Purcahse Price:$143,200
Repairs: $32,944
Carrying Cost: $746/month (utilities and loan payments)( carried for 2 months and counting)
Total invested:$177,636
ARV: $205,000
Listed at $209,950 ( on market 30 days, alot of interest and compliments but that doesnt matter because I have a big fat Zero offers) Major issue is home has a permitted garage conversion and buyers in that price range in the local market really want a garage. Home also has a seperate unpermitted studio 350sq ft with kitchen and bath, built very well and also remodeled.

I am cosidering lowering the price to $200k for a fast sell, refinancing the property and holding on to it as a rental for 2-5 years, or refinancing and advertise it as a lease option.

If I sell at $200k-$12k(commisions & closing $)- $178,382(one more month carrying cost added in) = $9,618 profit x capital gains at aprox 15%= $8,175.3 net profit and I split that 80/20 with my investor, so I would walk with aprox $6,540.24, Definitely not a loss but not the type of margins I like to see either.

The Refinance and Hold option looks like this, I have a lender willing to give me 75% of appraised value cashout in a 30 year conventional loan at 4.65%. Say it appraises for only $200k, I would get $150,000 cashout- origination fees, or about $148,000. I would use this money to pay off all but -$30,382, which my investor partner is willing to carry for me at 8% interest only for up to 5 years. If I go this route my numbers look like this:
REFI loan payment: $965($146k + tax & insurance)
Payment to partner: $202
Monthly Rents( Home and Studio Apt): $1950
Monthly Income: $783

I am wanting to pursue the 2nd option of refi and hold for the cash flow. This option gives me ownership of an aprox $200k appreciating property with no cash out of pocket.

BP Community please let me know what you as an re expert would do in this situation or maybe you have a plan that I have not thought of yet. Whatever I do I need to do fast so I can move on to my next rehab project. Thank you for your advice and input! Its much appreciated.

Regards, Jordan Amarant