Should I sell primary every 2 years

[Dorian Weber]

So a friend I worked with flips homes on the side and this year is on path to make 750k (legit money esp for a side gig) and he told me one of the best ways to build up income for someone with limited capital is to buy a home as a primary, start the two year clock and then assuming you added value and bought right to sell at the 2 year make, take the tax free gains and get the 2 year clock starting again.

Makes sense to me, but im wondering

1) if the primary would make a good long term hold would it be better to do a cash out refi and take some of that money (or does that still get taxed) and keep the property.

2) Should I locate a new unit, purchase it and then sell my primary as with this market I could end up homeless.

Aim is to maximise as much cash as I can over the next 2 years and then dump it into as many income properties I can at year 2 (so I would be able to do one more capital gains sale if I bought a new primary now)

Sorry if thats confusing but all info appreciated 

[Bill B.]

The only reason to sell the primary and buy a new one is to buy a much more expensive one and repeat. Otherwise you’ve already made the money and as you say, just do the cash out refi and avoid 6-10% in selling costs. Thee are many 2 year periods where a house might only appreciate 6-10%, and then you give all that appreciation to the realtor. 

I suppose another way to do it would be to rent out your current primary after 2 years and but a new primary. Than you still have 3 years to sell your first primary tax free fi the rental pet doesn’t work out. That way you’re earning appreciation on 2 properties tax free at the same time.