Flipping or holding and renting?

Question

As an amateur starting out, is it better to start with rentals for cash flow or flipping?

Orlando Spencer · Answer

Flipping has the risks associated with big losses, breaking even and/or huge gains. There can also be a lot of time needed to complete a successful flip. Rental property has been easier in my experience because you're not preparing for an Inspector nor an Appraiser. I'd suggest buy-n-hold initially because it worked well for me, however, you can begin flipping if you have time to insure contractors do what they say on-schedule, pending you've identified a property with adequate equity in a marketable location. Hope my insight helps!

Obi Dorsey · Answer

@Rita Koroll  It doesn't matter.  Just get started.  Read, network, study...but take action with the information that you gather.  You'll find what works for you and settle into a specialty that is yours.

Aaron Reynolds · Answer

Hi Rita, from what I have learned in my experience (having done both rentals and flips) and from reading other's experiences, there's no clear cut answer.  Everyone is different.  It depends on what your goals are (short and long term) plus what your skills are.  Can you manage a flip or do the work yourself?  Do you want to deal with tenants?  I encourage you to keep reading and learning to figure out what will fit you.  Good luck in your endeavors.

Rita Koroll · Answer

Thank  you AAron, Dave, Obi, Orlando and Michael.  I feel that buy and holds are a great way to acquire passive cash flow. I know it can be a headache and work, however I feel the benefits are worth it.  I would love to flip to make some money to buy rentals. I have a little money, and trying to start right, to build big. I'm reading and learning a lot. I own my own home which I am selling to get this started full throddle. I want to get out of the rat race. I have learned so much from rich dad poor dad. Your home is a liability and not an asset!

Michael Haynes · Answer

@Rita Koroll, Hello, do you start with a rental or try to fix up a house to flip? Does anyone have any sense out there? You start at the beginning. Pay off all your Debt. Study all you can about making money with Real Estate. There are the FliporFlop and FlippingVegas type shows on TV. The LA and NY real estate agent shows with high end property sales. There are youtube videos on all aspects of making money with RE. Save a pot of MONEY. Do you own your own home? Why not? Start there. First Time Home Buyers can get big discounts when buying a HOME. You need a home to live in. That is the safest place to start. If you have 20% down you don't have to pay Mortgage Insurance and save $100 a month. You can do like the commercial and see what loan you qualify for with Quicken Loans in your PJ's. Look at the 15 Year, 2.75% ones. How much would your PITI be and include "unforseeables."  You can Homestead for a Property Tax break in Florida. If you do your Due Diligence, you can find a nice home in Palm Harbor to fix up and get it at a discount. Make it worth more with your Sweat Equity or find a Handyman who does a lot of the work to learn how to deal with the help. In RE they say, "Location, Location," but, you really don't get the main idea and I don't think most agents do either. In Palm Harbor you have the opportunity to buy a home with a View and not just a house, next to a house, with another house in front. Street noise matters. Not in the flight path to the airport. Corner lots pay more property tax, etc. Live in your home for two years and you can "flip" it, without having to put up with tenants, tax-free because of the Residential Sale Rule. Then, do it again. The add on is when you are living in your Home, you can buy a Rental and learn how to deal with Tenants. I would suggest that you never buy a house that you would not live in. You can have this as your Basic Real Estate Portfolio and learn how to make money with other things like be an Agent or trade Futures.

Dave S. · Answer

Congrats on getting into Real estate. i started out finding local meetups this way (its free)

http://adf.ly/1eUkic

Rita Koroll · Answer

Thank you Aaron!

Flipping or holding and renting?

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