My name is Mike and I am new to BP but wanted to get opinions from some of the more seasoned investors out there. My wife and I have been getting involved with real estate for a little over a year now. Our success, as of now, has been fairly good. We own two rental incomes in Mobile, AL and are about to close on our first flip as well which is bringing in a good profit for a first time flip. We are also planning on moving to New Orleans within the next couple of months and are considering a duplex which we would live in (rent out the other unit to offset or completely cover the mortgage). We are an LLC holdings company and we likely be using some money from the flip for a down payment, but more important, will be redistributing money for estimated taxes, insurance, repairs on our current rentals in separate accounts.
Our business model revolves around the least amount of debt as possible (credit cards, mortgages, car payments etc.). So with that said, we are torn if whether another flip is the best route or continue driving towards more rental properties.
Thank you for any advice or suggestions!
@Mike Plitsch Congrats on your first flip, and welcome to the NOLA market (i guess congrats when you get here). I have a few opinions on your questions whether to focus on doing flips or rentals. First, the market has been on a tear down here lately so price's are up but rents haven't caught up with the price increases yet meaning the return on rents are lower. Looking at this it's generally a great time to flip and not necessarily the best time to buy long term rentals. Second, buying rentals locks up capital unless you get a loan to buy it so it really just depends on your financial situation . If you don't need the income from fliiping houses to live then it's ok to focus on rentals and build long term wealth, if your cash is limited then flipping is a way to build your capital if you do it right.
For me I spread a wide net when looking for properties and if I find the right deal I do it whether it's a flip or rental. And finally I think buying a double to live in one side is a great investment so go for it. On the above comments I'm talking about deals that aren't your primary residence.
Good morning Craig,
Thank you for your suggestions and opinions. You are correct in that the houses we rent in Mobile are more of an appreciation investment. We are probably going to still keep looking in Mobile for flip opportunities as we are more knowledgeable in that area when it comes to the housing market. I have been talking to other investors/agents in the area as well in which we have talked about possibly going in on certain deals together. I am a sweat equity guy so I can do a lot of work myself. I'm thinking this may be the best choice (flipping) to slowly build up capital. This in turn will allow us to pick up more rentals progressively in the long run for appreciation/long term investments.
We know a little bit about the market in NOLA, yet not enough to jump on something right away. I have heard, like you had said, that the market in NOLA has probably reached or even surpassed its' tipping point. In any case, probably not a bad idea to do some research when we move there. In retrospect, there are many areas in the NOLA area that are in a transition were a market that once was bad, is now a hot spot to invest in. Do you have any recommendations on how to connect with some more people who share the same investment goals in the NOLA area (meetings, clubs, etc.)?
Thank you again for your input Craig!
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