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All Forum Posts by: Justine Phillipson

Justine Phillipson has started 11 posts and replied 73 times.

Post: Should I Keep, Flip or Sell My Property? All advice welcome!

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58
Quote from @Nicholas L.:

@Justine Phillipson
I like 1.  You're pushing the repair cost into the future, but that's the wrong way to look at it.  "it's been a great cash flowing rental" because it needed these improvements - deduct them from what you've made already, not what you're going to make.

is this your only investment property?


 Really great perspective. I have decided that I am going to keep it as a rental :) My fiance and I have two other rental properties. I own another in South Bend, IN and my fiancé has one in Tulsa, OK. 

We also have a condo here in Scottsdale that we are living in and remodeling and will turn it into a rental once we can afford our "forever home"!

Post: Should I Keep, Flip or Sell My Property? All advice welcome!

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58
Quote from @Sophia Buesing:

I would fix it and rent it if the cash flow makes sense with current interest rates. 


 I agree, that's what I am deciding to do! thanks for your feedback!

Post: Should I Keep, Flip or Sell My Property? All advice welcome!

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58
Quote from @Jonathan R McLaughlin:

@James Hamling is absolutely freakin right about capex and its 'hidden' costs to cash flow. Not sure what your actual expenses for that will be.

However...you mentioned the home is trashed. If the pictures are accurate depictions of the current condition, you don't have a problem. A cleaning and paint touch up looks like its all thats needed from what you presented. I don't see how you get 10K of repairs on that.

I know these are old so maybe its grim? But if this is trashed to you then definitely sell. 


Thanks for your response! I don't think the house is totally trashed, but just that it's in rough shape- meaning it's not in turn-key shape and=will need work before it's tenant ready. I am just trying to be conservative with my estimate of the state of the homes and cost to fix it, and preparing for the worst. I am hoping that it just needs some paint and refreshing, and some kitchen updates :) 

There's also been some big maintenance items that the tenants hadn't notified me of in the past. For example, in early 2021 they let my property manager know that the bathroom floor had a "squishy spot"- but it turns out the floor had completely rotted out and you could see down to the basement from the floor. That was scary and alarming, and we redid the whole bathroom for them immediately. But it does make me wonder if we will find any other major issues that I haven't been made aware of because the tenants have lived there for 8 years. Are all the appliances working properly? Has the roof had any leaks? What shape are the floors in? Is plumbing and electric all working properly? Etc.

Hopefully I am wrong about the state of the house, and costs of repairs. But it's better to be prepared for the worst and pleasantly surprised :) 

Post: Should I Keep, Flip or Sell My Property? All advice welcome!

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58
Quote from @James Hamling:
Quote from @Justine Phillipson:
Quote from @James Hamling:

@Justine Phillipson without a doubt Option #3. 

The easy on to eliminate #2, I will start there. The argument is for an additional $35k you would gain an additional $20k on sale. But this is all hopeful "what-if's". If not a seasoned pro at doing long distance flip it's all but assured the budget will be blown in some way shape or form, so probably more like $40k or $45k to gain $15k or $10k, or worse. It's just too much risk for too little reward. 

Next, you stated several times hint's of not really having any long term interest in this property or area, but with other market and actions of interest. There is significant value in Opportunity Cost. 

Lastly, #1 is a mirage. Sure, you "could" do $10k reno and release. What if it's not $10k? What if that budget and timeline get's blown? And what after that, how much other cap-x is there? How is the heating system, the a/c?  Given the condition and mentions it seems safe to assume this unit is at least 20yrs old if not older, and now well into necessity of cap-x cycle of reaping. So for a whopping whole $600 per month, how much of what's next does that cover?     How soon is the next item?    How much mental weight would it be if knew the a/c was soon to go out and with it another 8 month's profit's. And followed there after by some windows and another 6 months revenues. And than a washer, a fridge, and then and then and then. 

I get the sense that option #1 is not a desired direction but more a begrudging one of frustration at "making less than" ____ amount. Know when to walk away.    Remember; pigs get fat and hog's get slaughtered. 


 Really good perspective! I definitely do have a long-term goal of generating passive income and building long-term wealth through real estate, and I've been very happy with my decisions so far. When I bought my out of state rentals, I was living in California and was priced out of the market.

Now that I live in Arizona, I am in a more affordable market. Which is why I am not interested in doing future investments out of state. It's not that I am feeling burnt out or frustrated with my current properties. 

I do want to keep my rentals, as they've been great properties thus far! I just want to weigh my options and be pragmatic about my next step.

I agree that Option #2 has the highest risk, and honestly would be the biggest headache.


I would encourage to consider the Opportunity Cost, that I have not heard/seen in consideration as of yet. 

It sounds like your situation in life has changed, and that have a certain focus and direction that sounds like your pretty well set for. So, what best facilitates your next steps in life, holding this as-is, or liquidating to help fuel your next actions in life? 

That's key, Opportunity Cost. 

Sure, you "could" make some more $ over time holding. What's the other side of that coin? What would having $20k+ additional in pocket now do? Would it empower a flip or two over next year doubling or tripling it?     Would it facilitate a different LT rental who has better appreciation and returns? 

What is the Opportunity Cost to holding? 

That's the missing math here to help clarify which option is the most prudent and profitable. 

As well as where cap-x is at with existing property, what expenses are to come and how soon. I don't see it detailed what the cost's of holding are, which cap-x is a major factor of that. 


 Really great perspective! I definitely need to consider that into my options and then weigh them out. Thank you!

Post: Out of state investing

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58

Hi Henry,

How long have you been managing properties without a property manager?

As an out of state investor, I couldn't imagine managing my properties without a property manager. They've been a life saver, and have provided many updates and repairs to my home to maintain the value and quality of the home. Plus their expense is a tax write-off. 

Kudos to you if you're successfully managing your properties remotely, but I think a quality property manager is worth the investment. 

Post: Should I Keep, Flip or Sell My Property? All advice welcome!

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58
Quote from @James Hamling:

@Justine Phillipson without a doubt Option #3. 

The easy on to eliminate #2, I will start there. The argument is for an additional $35k you would gain an additional $20k on sale. But this is all hopeful "what-if's". If not a seasoned pro at doing long distance flip it's all but assured the budget will be blown in some way shape or form, so probably more like $40k or $45k to gain $15k or $10k, or worse. It's just too much risk for too little reward. 

Next, you stated several times hint's of not really having any long term interest in this property or area, but with other market and actions of interest. There is significant value in Opportunity Cost. 

Lastly, #1 is a mirage. Sure, you "could" do $10k reno and release. What if it's not $10k? What if that budget and timeline get's blown? And what after that, how much other cap-x is there? How is the heating system, the a/c?  Given the condition and mentions it seems safe to assume this unit is at least 20yrs old if not older, and now well into necessity of cap-x cycle of reaping. So for a whopping whole $600 per month, how much of what's next does that cover?     How soon is the next item?    How much mental weight would it be if knew the a/c was soon to go out and with it another 8 month's profit's. And followed there after by some windows and another 6 months revenues. And than a washer, a fridge, and then and then and then. 

I get the sense that option #1 is not a desired direction but more a begrudging one of frustration at "making less than" ____ amount. Know when to walk away.    Remember; pigs get fat and hog's get slaughtered. 


 Really good perspective! I definitely do have a long-term goal of generating passive income and building long-term wealth through real estate, and I've been very happy with my decisions so far. When I bought my out of state rentals, I was living in California and was priced out of the market.

Now that I live in Arizona, I am in a more affordable market. Which is why I am not interested in doing future investments out of state. It's not that I am feeling burnt out or frustrated with my current properties. 

I do want to keep my rentals, as they've been great properties thus far! I just want to weigh my options and be pragmatic about my next step.

I agree that Option #2 has the highest risk, and honestly would be the biggest headache.

Post: Should I Keep, Flip or Sell My Property? All advice welcome!

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58
Quote from @Logan Laperriere:

When I am rehabbing one of my rentals I always look at the cost of updates vs. the payback time. If the payback period is 2 years or less I will always do the updates. Updates/Upgrades with a 2-4 years payback will be done depending on my overall goal for the property. The $612 monthly profit does not account for items like future repairs, cap ex, maintenance, and vacancy. Once those are factored in your are looking at closer to $450-500 a month profit. $5400-6000 a year on your initial $16,500 investment is a great ROI. Even with the additional $10K in repairs you would be around a 20-22% ROI.

If you chose to sell and flip a property in Phoenix, what would your anticipated profit be?  


 Thank you so much for your detailed response! Really great perspective, and confirming my belief to hold onto the property. 

I am still in very early stages of planning out my first flip in Phoenix, so I need to start working on running those numbers!

Post: Should I Keep, Flip or Sell My Property? All advice welcome!

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58
Quote from @Stephen DiJulius:

@Justine Phillipson What township is the house in? Location in SB could help determine the best direction.


 It's in the Lincoln Manor neighborhood. I will send you a message :)

Post: Should I Keep, Flip or Sell My Property? All advice welcome!

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58
Quote from @Caleb Brown:

I'd definitely fix it up if you have the money. As far as keep or sell I'd crunch numbers. What would you do with the net proceeds if you sold? If you can 1031 into a better property I would. You can also fix up and keep then do a refi. Use those proceeds to reinvest. It's been a good property for you. Turnovers happen, part of the game. The good thing is you have equity to reinvest. I'd try to further your portfolio there unless you are burnt out on investing there

I agree with you. I think fixing it up and keeping it would be the best idea. I am a little nervous to refinance because then my interest rate will go up. But I do like the idea of doing a cash-out refinance. If I sell it, or did a cash-out refinance I would take my proceeds to reinvest in my first flip in my local market.

Post: Should I Keep, Flip or Sell My Property? All advice welcome!

Justine PhillipsonPosted
  • Real Estate Agent
  • Scottsdale, AZ
  • Posts 74
  • Votes 58

My long-term tenants just put in their 30 day notice, the house is in rough shape, and I live out of state. I need advice on what I should do next. 

My property is in South Bend, Indiana. I live in Arizona, I purchased the property site unseen. I have never been to the property. I purchased the home in 2020, with the tenants still in place. They have lived in the property since 2016. It's been a great cash-flowing rental. 

These are my 3 options that I have. Below are my estimates of costs and value. Let me know if I am missing any other options. 

Property Info

  • Purchase Price: $62,500
  • Current As-Is Value: $80,000
  • Loan Amount: $46,000
  • Interest Rate: 5.125%
  • Monthly Payment: $400
  • 3 bed, 1 bath
  • 800 Sq. Ft with large unfinished basement. If the basement was finished it would be about 1,500 sq. ft.

Option 1- Fix & Rent

  • Cost of Repairs: $10,000 (Estimate to get the house rent-ready, would leave the basement unfinished)
  • Market Rent: $1,100
  • Monthly Profit: (Rent $1,100) - ($700/month) - (8% property management cost is $88) = $612/month
  • Other Benefits: Tax write-off, continued appreciation, continue to pay off mortgage, risk-management against my other rental property, passive income. My property management company is willing to handle and manage the repairs (but since it'll be expensive I will likely want to go there so I can manage some of the repairs and pick out my materials).Out of the 3 options, this would come with the least amount of tax repercussions.
  • Cons: Moderate stress. May or may not require any travel. Will require a decent amount of money out of pocket and would take 9 months of total rent to re-coup my repair costs, or about 2 years of the “increased” rent to pay for repairs. 

Option 2- Flip & Sell

  • Cost of Repairs: $35,000 (There's a large unfinished basement, if I flip the home I would finish the basement)
  • After Repair Value: $125,000
  • Take Home After Loan Payoff: $44,000
  • Other Benefits: Most profit, would allow me to be invest in my first flip local in Phoenix.
  • Cons: This option would have the Most amount of stress, will require travel and stress. Would require a lot of money out of pocket and would hit me the hardest with taxes, but would give a high return and open up funds for me to invest locally here. This would also take the most amount of time.

Option 3- Offload through my work (I work for an investment firm. Would sell off market, as-is to a cash buyer)

  • Cost of Repairs: $0
  • Sale Price: $70,000
  • Take Home After Loan Payoff: $24,000
  • Other Benefits: No stress or travel, but minimal return. Would sell quickly, and would open up some funds to reinvest in a flip local to me.
  • Cons: Would be selling off-market and as-is, would get me the lowest return. A moderate hit on taxes.

Out of the three options I am leaning towards option 1. I am not excited to have to put a lot of money into the property, but my ultimate goal is to continue to build wealth and passive income through real estate. I believe the market rent would be about $1,100- which would be great because my tenants were only paying $750. I kept the rent low because they were great tenants and the house wasn't in good shape. 

But I also have a goal of doing my first flip locally in Phoenix. Option 2 & 3 would both open up funds for me to be able to do a flip. 

Below are some photos of the condition of the home. Mind you, these were taken in 2021 so they are dated but they're the most recent photos that I have.