Recently on the BiggerPockets Podcast, I was speaking to Thach Nguyen, an investor and agent located in Seattle. He had a powerful point about real estate investing he was determined to relay to others: “You’ve got to own real estate if you want to be wealthy.”
Think You Want to Flip Houses? First, Consider This
I asked Thach to elaborate, and here’s what he said.
After doing this now for 30-plus years, flipping houses—like selling real estate—means you’re on this treadmill, and you are running. The minute you get off the treadmill, you’re not making more income selling real estate anymore. Flipping houses is the exact same way. When you’re on the treadmill running, it’s fine. When that treadmill stops, then you’ve got no more money.
And let’s be honest, why are we flipping houses in the first place?
Everyone I know, they got into real estate—they all got inspired somewhere, somehow—because they want to own real estate sometime down the road, so you can actually live off a passive income. But they got caught up, in my opinion, basically comparing themselves to the Jones’.
“Well, Brandon flipped 20 houses. I’m gonna do 30!”
“David flipped 30. I’m going to do 50!”
And now, they’re in this rat race chasing who gets the most houses. But at the end of the day, 20 years down the road, they’ll realize, “Crap, I’ve got nothing to show for all my work, and I’ve got no passive income.”
So, they’ve got to keep running on the treadmill—even at 90 years old.
I agree with Thach.
I can’t tell you the number of investors I’ve talked to who are major flippers, and they’ve been doing it for decades. And then, they realize, “Yeah, I’ve got to get myself some passive income. Because if I stop, I’m broke.”
Even if they are living great now, have a great car, a great life, a great house—as soon as the market crashes or, you know, something slows down, they’re almost immediately struggling.
What do you think about flipping houses and about the sustainability of this investment strategy?
Weigh in with a comment below!