To Flip or To BRRRR that is the Question

[Daniel Wolcott]

Hey BP Fam, I have a deal that I would greatly appreciate your advice and insight on. We have a 3/1 SFR, 900 SqFt with a purchase price of $170K, Rehab cost of $40K and an ARV of ~$315K. I am trying to decide if it is best to Flip or BRRRR. We are partnering on this deal (50/50) so if we were to BRRRR we would have to buy out our partner which would be roughly $45K (estimated profit from flip after expenses) bringing our all in investment to be around $255K. Rental rates are around $1600/Mo. When I calculated this on my own spreadsheet I was getting roughly a 6.7% Cap Rate and a $270/mo profit (incl 5% vacancy rate and 5% repairs, we will be replacing all of the appliances, water heater, etc) but when using the BRRRR Calc on BP it was giving me a much smaller cap rate and negative monthly/annual returns. I am not sure what it is considering that I don't have in my spreadsheet.

I am ultimately a strong believer in Flipping will make you rich and Rentals will make you wealthy so I would prefer to hold on to it as it real property is an excellent hedge against the impending inflation we will experience. My only plug for Flipping is that we are in a very hot market right now that might flatten out in the near future so taking as much profits as possible now. What are your thoughts and/or is there other things I should be considering. Thanks in advance.