Good day fellow investors. I am new to this site, and real estate investing, so please forgive me upfront for any questions that may seem remedial. I recently moved from the state of NC to Ohio. My family and I are currently renting month to month and are "home shopping". I do have a full time job and am looking to use real estate investing as a second income for my family that currently only lives off of one. My questions is this...Since I do not currently own, is it wise to purchase a property as an owner occupied property with the intentions of flipping it? My thoughts are that I can enter into the real estate investing business this way with a smaller down payment (thinking FHA and more specific, 203k). Once I flip the home (using the 70% rule), I am hoping to not only profit enough for another down payment on an owner occupied property that I plan on staying in, but also have enough to repeat the flipping process. With all that I have read, I feel that this method may give me the capital I need to start the business and keep it afloat. Contstructive criticism here is welcome!
Owner occupied live in flips have their advantages and disadvantages. The section 121 exclusion also permits the first $250k ($500k for married couples filing jointly) of gain on the sale of your primary residence to be excluded from your gross income. Essentially, profits are tax free. While you may not be living there for two years, there are some exceptions that allow gain exclusion even if cannot meet the two year requirement.
The downsides are more of the practical and day to day variety. Live in flips, especially ones that require substantial rehab, may not be ideal for the whole family. Make sure the everyone's going to be able to deal with this reality before you go ahead and do it.
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