Raleigh NC Flip or Rental?

[Nick Schultz]

Hi Everyone! I have a deal I'm looking at that has me questioning which route I should take with it and I would like your feedback: 1150 sqft 3/1 all brick ranch with an unfinished basement (extra 1150 sqft in the basement). The basement with half underground so there is access to the outside, and windows (one side has small transom windows). The back corner of the house is in the 100 year flood zone. Is it best to completely avoid properties in a flood zone? My initial thought was to convert it into a duplex, renovate and rent the upstairs and downstairs separately. Purchase price: $190k

Estimated Rehab: $40k (Finish basement and convert into 2/1 with kitchen)

Estimated Net Cashflow: $370/month 

Main concern: Resale of a property with an untraditional layout.

Option 2: Live in the upstairs and Airbnb the downstairs at ~$75/night. Would generate ~$1100/month if it rented half of the time. 

Main concern: Demand for a basement as an Airbnb in a location that is a 10 minute drive from downtown and otherwise doesn't stand out.

My GC looked at the property with me and suggested I put more money into it and flip it as a SFR.

Estimated Rehab: $70k ARV: $330-350k Profit: ~$40-50k after sales costs

Main concern: How does the flood zone affect the resale value and general interest? 

I'd really appreciate any feedback you might have. Thank you!