Buy and Hold Length

8 Replies

Hello,

When using the BRRRR strategy or the Buy and Hold Strategy, generally how long should people hold their properties? And on top of that, does the length depend on the deal, market, or where the investor is with their progress? Meaning, if I am just starting out, should I generally try to buy, renovate, lease, and then sell the property quicker than I would if I already had a numerous amount of units under my belt?

Thanks,

Nate Witte

@Nathan Witte  

The purpose of the BRRRR method is to gain cash flowing rental properties without permanently tying up your own cash. By the time you get to the Refinance part, you should already or be close to having a paying tenant in place. That allows you to then pull all your money out and Repeat (buy another property).

Your hold time is completely dependent on you. If you go through this process, the point is to hold the property and collect the monthly cash flow. You hold the property for as long as you wish to continue collecting the rents. There is no recommended time, just depends on your goals. But after 1 year, you won't pay capital gains taxes if you sell so you should atleast shoot for that.

So when should you sell? Also depends on you and your goals. Maybe you believe the market is at it's peak and it would be a good time to get max value from the home. Maybe you found a bigger multifamily deal and need the extra capital. Maybe you just hate that property and want to redirect your capital. Maybe it doesn't perform like you thought.

It all depends on you. I know I've said that a hundred times now, but it really is. 

Originally posted by @Nathan Witte :

Hello,

When using the BRRRR strategy or the Buy and Hold Strategy, generally how long should people hold their properties? And on top of that, does the length depend on the deal, market, or where the investor is with their progress? Meaning, if I am just starting out, should I generally try to buy, renovate, lease, and then sell the property quicker than I would if I already had a numerous amount of units under my belt?

Thanks,

Nate Witte

Until your children inherit the property from you.   

Like the previous poster said, it depends on your goals and how you feel about the property itself. Personally, I'm going to collect properties and not sell anything for a long time. Just keep them as rentals and watch my equity grow! Unless an opportunity arises that I can't pass up. 

Everything I buy I plan to hold for 10yrs min. Doesn't mean I will actually hold for that entire time, something may come up and I would want to sell it but that's my mentality and game plan.  I want time to be on my side. 

Warren Buffett said his favorite holding period is forever. If a property is cash flowing well why sell? Unless you feel that the market is at its peak. However that could be speculating and REI doesn't allow for much of that. Buy and hold and hold and keep holding. The BRRRR strategy is designed so you never have to sell. The only exception is a 1031 exchange for a better cash flowing property that you would not be able to buy otherwise