Harder to Find Buy/Holds or Flips?

Question

Hey Everyone!Im trying to plan my business model for the next couple years and debating if I want to aim for flips or buy and holds. I have a day job right now I dont NEED cashflow but cashflowing will free up capital from my day job to reinvest. So both seem like a solid choice. So my question is what is typically harder to find good deals on? Im in the Dallas Texas market. I've done one flip and I've rented to tenants before so I have a bit of experience in both. So I feel the deciding criteria is which path I can manage to find the deals in. I plan to mostly work with wholesalers and the MLS as apposed to finding my own off market deals.

Thanks!Jim Welch

Bart H. · Answer

Buy and holds imo are much easier and more forgiving.  If you are in a market with long term growth prospects (and we are), then over the next 10 years or so price appreciation will be a tailwind on the returns of your rental.  a flip requires you to buy, rehab and sell correctly.  If any of those go wrong, you can lose money.

I don't know if we will be in a down real estate market in the next 5 months to a year, but I am pretty sure in DFW there will be decent annual growth over the next 10 years.

We have done both flips and rentals, and honestly we like the flexibility of having multiple outs where out exit strategy can be either selling a house or renting it out.

Peter M. · Answer

@Jim Welch I'm in the same boat as you and I agree with what @Jim Cummings says. I want to build up my buy/hold portfolio but sometimes the number just don't work so I plan to do whichever makes the numbers work. However with the way prices are here now, the numbers seem to lean more towards flips than rentals at least until the market slows down. Plus I figure even if I plan to flip and it doesn't sell, I can rent it for a year with minimal cash flow and try again the following year but I have a couple other rentals that cashflow that can offset for a little while.

Jim Cummings · Answer

@Jim Welch. As it sounds like you may be familiar with both Flips and Buy & Hold - why don't you let the market make the decision. Go for whichever property comes up first that piques your interest and meets your criteria.

I consider myself  a "Buy & Hold" Investor, but I keep an eye out for potential Flip Properties. Unfortunately, they seem to be few and far between.

Harder to Find Buy/Holds or Flips?

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