Flip vs Buy and Hold

[LaRhonda M]

Those of you that do a combination of long-term investing and short term flips? I am fairly new to investing, but I always thought I'd hold everything I bought and simply build out my rental portfolio.

I have a property that I am in the middle of purchasing which is located in a great location/neighborhood of Atlanta. My first instinct was for it to be a live-in rehab for me. Which puts me in a better location, slightly larger home, and a yard. I'd then rent out my current townhome which I can rent out for monthly cashflow of about $800+. My long term goal is to buy and hold - creating passive income. This would be my 3rd property all together.

Today I started thinking of what the benefits would be to flip the home instead of living in it, as I was able to purchase the property at $245,000 which is WELL below market value of the homes in the area. After approximately $50-$60K in rehab the home would have an ARV of , $550,000+, and for approximately $150K (upper level addition) could hit an ARV 700K+, based off of the comps in the area

Or hold later use as a rental or Airbnb, which it is a great location for each of those options as well.

How do you guys typically analyze the better option?