To move to a cheaper market, or invest now?

Question

Brynn Misener · Answer

Hey @Joseph Johns, everyone's strategy is going to be what is best for you.  My business partner and I are choosing to invest in fix and flips to generate income for our long term goals, but we are full time real estate professionals so what we generate is what we get.

In the end, if the numbers work they work - whether the strategy is fix and flip (even with high lending interest and points) or buy and holds.

Andrew Ashby · Answer

@Joseph Johns, personally I recommend getting started in buy-and-hold first but that's only my own experience. I am very interested in doing flips, but I know that I personally don't have the network of private/hard money lenders who can continuously offer me affordable financing. If flipping is to be something repetitive, you likely won't be using traditional mortgage loans because it's too slow and every single new one is reported on your credit. Additionally, buy-and-holds are more forgiving of mistakes, i.e. paying too much, renovating too much or too little, etc. I'll step out into flipping once I have a close circle of private money lenders who can repeatedly offer me $100,000 loans at less than 10% (most hard money lenders want 12-15% plus points). Secondly, for flipping, you have to consider your funnel. You're going to have to either establish a close circle of wholesalers who can feed you off-market deals at a reasonable price, or you'll need to establish a powerful marketing machine to find the deals yourself.