BiggerPockets

I'm not extremely experienced, but I'm well on my way, and I would say that some combination of the two would be best, especially if investing is your only source of income. For instance, you could keep every 3rd house that you rehab as a rental. Or the ones that need the least amount of work and time could be held as rentals. That way you balance short term income with long-term cash flow.

Over the years I have known both that have done well. On a short-term the rehabber will strike gold when everything falls in line. It all depends on market conditions and financing. Over the long haul the accumulator will outlast if done right. Buy and hold can fall by the wayside if over-extending meets with unfavorable conditions.

You have to eat. Investing is what you do if you have more than enough to eat.

I've done quite well with a buy and hold strategy. Flipping is more of a short term strategy that can produce good returns now. Rental properties require some investment upfront and can provide current cash flow and when done right can build solid future wealth.

IMO you need to have some activity that creates current income and something that will build for future retirement. Trying to solely live on rental properties can be quite difficult especially if you are just getting started.

Short term: rehab
Long term: rentals

The $100-$300 cash flow/month won't match the $25,000 from a flip - not until years have passed. (Substitute your own numbers in there) But it's not just cashflow, rentals give you appreciation (well...not in the current market, but usually), and also give you tax advantages. And of course the rentals bring in the money year after year after year after year....

I agree with those who say use rehabbing to fund your rentals. Use the tax advantages from rentals to lower how much tax you need to pay from all that rehab money :) But be careful not to overextend yourself with the rentals - you don't want to lose everything just cause one thing goes seriously wrong.

But the real secret is to build your business into an actual business. Where you can hire others to do all the work for you, and you reap the benefits of 5, 10, 20 or more people (as they reap the benefits of steady employment). Then even if you stick with just wholesaling/rehabbing, you can make it big.

Good luck!

I know several rehabbers/flippers who make more than $200K per year, and I'm guessing there are quite a few here on BP who make that much...

how do you find a commercial property with $25k/mo cashflow? unless you're spending millions and millions.

Several years ago, I set a goal of moving to a new area and making a million dollars in one year, starting from scratch. I moved to SO TX and actually was well on my way for about 5 months. I was a little behind my schedule, but had 8 flips in escrow, all with a nice profit. Then the changes came with fannie-freddie on only 4 mrtgaged properties, down from 10. Seven of the eight properties dropped out forever. My goal was dead, but as JSCOTT said, making over 200K is done a lot. Need a full blown team, super area and adaquate capital. I was buying on court house steps in Hidalgo, TX.
I doubt I could do the same today in TX and feel 100% that I couldn't do it in Lee County, FL, where I've been for last 2 years. Rich

Go ahead Ann Bellamy. You know your stuff!!

Money doubles every 4 years with a return of 15% Then quadruples in 8 years. Multiplies 8x in 12, 16x in 16 years. So if you start out with 100k in year one, say at age 30, by the time you are 46, your 100k will grow to 1.6 million. And yes, you'll be 46 and be getting all the girls! By consistently hitting 15% singles over the years.

Then there is the matter of adjusting this return for "risk". Some strategies are riskier than others. Flipping is riskier than rentals. Rentals are riskier than holding discounted notes or making private RE loans.

So stick with the strategy that produces the lowest risk adjusted (PITA adjusted) return as close to 15% as you can.

I have discounted notes, and private loans in my IRA earning 15% or more tax deferred). If somebody I knew and really trusted came across a screaming deal once in awhile, I'd go in with him/her.

I think RE, like any other biz, is about meeting and networking with he right people. Not just about what strategy (flips, holds, paper...etc.) you use.

Uncle Phil