is there room anymore?

4 Replies

I'm new to real estate investing. I have one rental unit and was looking for more but not long ago a friend recommended that I pursue fix-and-flip versus buy-and-hold because if done well it would get me "cash in the pocket". So the question is...and I know this will sound stupid...is there room to do this anymore or is it already overcrowded?

From what I've read, the fix-and-flip strategy is primarily used to acquire capital, whereas buy-and-hold is mainly used to build wealth. So which strategy you go with depends on your current position and what your goals are.

As for if there's still room to do it, Brandon Turner recently said in a webinar that you can't find great deals anymore. You have to make great deals. So no, it's unlikely that you'll be able to just grab any old property off the MLS and flip it, but if you look for other opportunities (direct mail and other off-market methods, and maybe the occasional special MLS listing) and get the seller to agree to the price that makes your numbers work, it's definitely still possible.

First, stop listening to your friend.

Second, why wouldn't there be room for it any more?  

Third, the location for my statement number three is found in your ability to analyze and find the micro markets where these properties are found.

Fourth, and why I said "stop listening to your friend", is his/her comment about "fix and flip" putting cash in your pocket, is short sighted.  Yes, F & F does put cash in your pocket...and it stays there, right up to the time you spend it...once.  Then it's gone.

Hold properties, rental/cash flow properties, do the same thing...repeatedly, month after month.  If you buy them correctly, meaning you get your cash back out of it ASAP to use on the next property, you can still keep the property ...and its cash flow, coming every month.  The ability to get your original  ash out ASAP allows you to buy more of them.

The correct answer is you will be doing both.  You "flip" for the profits.  After every flip, you reuse the original cash on the next deal, and accumulate the profits enough to buy "Cash flow" properties.  The "machine" keeps reusing the same original money, but generating new profits, so you can keep buying new cash flow properties.

There's a more advanced way (not complex or hard though) that allows you to put this on steroids.

Originally posted by @Jacob Sowles :

From what I've read, the fix-and-flip strategy is primarily used to acquire capital, whereas buy-and-hold is mainly used to build wealth. So which strategy you go with depends on your current position and what your goals are.

As for if there's still room to do it, Brandon Turner recently said in a webinar that you can't find great deals anymore. You have to make great deals. So no, it's unlikely that you'll be able to just grab any old property off the MLS and flip it, but if you look for other opportunities (direct mail and other off-market methods, and maybe the occasional special MLS listing) and get the seller to agree to the price that makes your numbers work, it's definitely still possible.

 There are plenty of great deals out there.  All you need to do is know how to analyze them, how to "use" them, how to "enter/exit" them, and where to find them.  Nothing to it.  No really, nothing to it.

@Chris LumLee It depends on you if you want the money. It’s there for the taking, up to you if you want it.

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