Buy and hold or fix/flip?

[David Zeek]

My wife and I are just starting the REI obsession and we currently have two rental properties, which we manage ourselves. My wife has a lot of fire for the RE game and wants to fix/flip to make capital to invest into more buy/holds. Me, on the other hand, rather not deal with rehab/remodeling and invest into buy/hold for passive income.

We currently have approx 40k of capital to either fix/flip or potentially buy two turnkey properties. Turnkey properties can sale for around 100k in my area; therefore, using 20k for the down payment on each property. Renting the properties and doing the beer math in my head, we will roughly see a 10-13% cash on cash of return.

Here’s another kicker, I’m in the military and will not be home for the next 11 months, and my wife still wants to do a fix/flip! I think a buy/hold and rent it out will better fit our needs, due to me being gone and I can’t help her with renovating a home.

Any advice on driving home the point of buy/hold/renting is better for passive income and long term wealth?

Thanks y’all!!

-Dave

.

[Dennis Cosgrave]

There is no hard and fast answer here. It is all a function of the market. If the market is volatile, I would be more inclined to fix and flip in order to minimise risk. If you are in an area where the market is very stable, then a buy and hold strategy makes more sense.