Rehab Rent Or Sale
I just brought a property fmv 42k at 17k Its going to take about 5k to repair. This is my first porperty. Buying and repair has exhausted my cash flow.. My question is should I refi and rent or sale for profit. Which is better for me to generate more cash to buy houses 
Ed:
Sell it "By Owner" to generate more cash flow. You dont want to deal with rentals
yet if you dont have any cash-flow for vacancies, repairs etc...
Generate some quick cash-flow. Go out and buy another one! Take some of your profit and educate yourself on how to
"wholesale" properties as well.
Best Riches,
Jeffrey Adamnull[LIST]
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Thanks, I think I will, but if I refiance nand get a renter. the rent would pay the mortgage and I would have cash flow right? what is the drawbacks doing it that way.
Drawbacks are repairs, non-payment
of rent. I have had many houses that
cash-flowed $300.00 a mos and a year
and a half later the people moved out
and I had to do a complete rehab!
I spend all my cash-flow.
My suggestion to you is to sell it by owner, educate yourself all you can on
real-estate and buy some more!
Best Riches,
Jeffrey Adam
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The draw backs can't be staggering if you don't watch out. Getting into the rental business is not a game, and the people who treat it like so end up with all their refinanced properties in foreclosure. The answer is yes you could do it that way, but the cashflow would not really be worth it after expenses, which includes that healthy mortgage payment. How much cash flow are you expecting to get from this house? Are you trained on how to manage a rental? Do you have cash in the bank to put aside for mantainence and repairs? If your ready for that, and believe that you can do it and look good financially, then do it. If you are undecided or questionig yourself, then maybe you should consider selling the house and moving on with you investing career. Wish you much success!!!
Thanks I am going to sell and build up some cash flow
Being a landlord is definitely not for everybody, but I love it. I'm a warped personality that loves paperwork. My husband is the hard-ass that knows the tenants are tenants.....not friends, and helps me remember that raising rents, threatening eviction, etc is not being mean...its business.
We have 8 units that were all bought as "fixer-uppers" that we have held. We just put an offer on two duplexes that make more sense to rehab/resell. It just depends on what makes most sense for the property. We have really low vacancy rates in our area so the cash-flow is not an issue. As far as maintenance costs go, sometimes you really have to decide if something NEEDS to be fixed or if the tenant and/or you WANT something to be fixed.
The upside to holding rental property is that it really brings down your tax liability. Our rentals completely eliminate our tax liability resulting in us getting ALL of our withholding back every year. That Federal and State "year-to-date" withholding figure on December's paycheck....that's what we get back in April. Last year it was nearly $9,000.....how's that for adding to cash flow!
If you decide to be a landlord, check with your state to see if there is an apartment association you can join. They have free forms, advice, networking socials, etc for a very small annual dues. I paid around $80 for membership and I can ask the California Apartment Association attorney any questions I have, print out any form I need off the internet, attend a myriad of classes they offer, etc.
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I see nothing wrong with holding as a rental. (I do both rentals and flips). If you can refi and get a couple $$ in your pocket, have positve cash flow, and get your money back for the next deal, there is very little downside.
Yes you can get bad tenants, but one thing I have learned is that if you treat your tenants with respect, they will do the same for you. Don't act like a slum lord and you won't get slummy tenants.
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