First investment problems - LTR

[Matthew Hermenau]

Hello BP forum!!

I'm a new investor and recently purchased an out of state property (3 bed/2 bath) in Cleveland, OH. After finishing up my deal I'm finding it very difficult to fix a few city violations at a reasonable cost and with contractor shortages leaving overpriced quotes from handymen. You must fix all violations before being able to rent. I also inherited a 30 yr old furnace and 12 yr old water heater which will probably need replacing but otherwise no other major cap exp. My loan is a 7.5% 7-1 ARM.

At first my COC was 5-7% but now it's looking like maybe 1-3% and the monthly rent will just pay off all the expenses leaving minimal cash flow ($50-100/month)

At this point I’m wondering if I should just 

1.) Wait a few years, rent and refinance to cash flow more leaving money in the property.

OR 

2.) Fix up any city violations and try to sell it (likely taking a slight loss). Wiping my hands from this deal. I am worried about this market we’re entering into as a seller and if it will burn me with less people purchasing homes. 

Thank you so much in advance!