Is it preferable to do flips in hot market /seller market than rentals? 

@Ari Hadar  If theres enough meat on the bone during a downturn and with the crazy lumber prices then yes. Many speculators lost their shirts and files bankruptcy during the last crash because they could not get out of the deal at a profit / pay back hard money. You can make alot of money certainly just make sure you run the numbers and they make sense and can tolerate the risk for the worst case scenario. If you have an exit strategy or at least can rent it out at a profit instead of flipping then do it. 

@Ari Hadar if the numbers makes sense of course. Make 20, 30, 50k, now vs 1k a month,,,,,,, move on and do anther 

Yes.

Originally posted by @Dan M. :

@Ari Hadar If theres enough meat on the bone during a downturn and with the crazy lumber prices then yes. Many speculators lost their shirts and files bankruptcy during the last crash because they could not get out of the deal at a profit / pay back hard money. You can make alot of money certainly just make sure you run the numbers and they make sense and can tolerate the risk for the worst case scenario. If you have an exit strategy or at least can rent it out at a profit instead of flipping then do it. 

What you mean is when i analyze a deal i must verify it cashflow so if the market downturn the rents usually do not drop or slightly drop so i can still profit from the cashflow? 

Meaning if you are unable to flip the property could you rent it out instead and not lose money? Say you anticipate the house to sell at 250,000 and your all in for 230,000. Say the market drops and now the home is only worth 220,000. If you were to get a mortgage on it would renting it cover the expense of the mortgage so you could hold it for a while until you get to your at least break even price? 

I attempted to flip a property way back when and it did not go as planned. It sat on the market for 4 months and after commission costs and the carrying costs of taxes I would not stand to make a dime. So I said to myself you know what let me rent it real estate values tend to go up over time. I made a whopping 30 dollars a month cash flow. Well fast forward to now obviously being a hot market its 100,000 dollars over my original expectations to sell it. And I will continue to hold it as a rental because rent has also increased. 

@Ari Hadar Theoretically yes. But in the end, it all comes down to the math on the individual property. 

In a hot market, homes usually sell quicker and have higher asking prices. Unless you are buying cash, then you will have a higher mortgage amount and the cash flow will be tighter for a rental.

If you were to flip, you can capitalize on some of the hotness in the market while rehabbing.

In a downturn, the home prices tend to be lower, so while your home will be cheaper, your appreciation chances will be lowered.

@Ari Hadar , I am a flipper now versus buying long term holds. Tap into the appreciation when you create it and get out before more Capex hits.

In quickly appreciating markets, it is hard to find cash flow in rentals, but easy to find forced appreciation in flips.  But as others mentioned, flips are a risk.  If the market shifts, which can happen quickly, you end up losing money.  You could hold as a rental, which is a great fall back plan, but there are risks to rentals too, as mentioned above.  And if you are not cash flow positive from the rental, you are spending money every month anyways.  And remember, a newly renovated property will typically always sell for more than a 5 yr old renovated property, so those renovations may need to be done again to get top dollar at sale.

Originally posted by @Dan M. :

Meaning if you are unable to flip the property could you rent it out instead and not lose money? Say you anticipate the house to sell at 250,000 and your all in for 230,000. Say the market drops and now the home is only worth 220,000. If you were to get a mortgage on it would renting it cover the expense of the mortgage so you could hold it for a while until you get to your at least break even price? 

I attempted to flip a property way back when and it did not go as planned. It sat on the market for 4 months and after commission costs and the carrying costs of taxes I would not stand to make a dime. So I said to myself you know what let me rent it real estate values tend to go up over time. I made a whopping 30 dollars a month cash flow. Well fast forward to now obviously being a hot market its 100,000 dollars over my original expectations to sell it. And I will continue to hold it as a rental because rent has also increased. 

If i want it to cashflow as a rental is it possible with short term high interest loan and after refi loan wirlth low intetest(BRRR)?

Yes definitely is possible to do that as long as your construction work gets done on time. Banks will prefer to see it rented out and generating income. 

Yes but if the market is hot, acquisition can be a challenge.