What's next after flipping?

22 Replies

I've been flipping houses for a few years now and I've done around 20 flips which in turn have allowed me to buy rental property's.

But between me burning out on flipping and the low inventory and the massive numbers of flippers and the low returns, I'm not seeing a solid yearly salary I can pull in from it.

I am planning to buy some short term rental properties but any money pulled in from them will not be touched for around 8 years.

So I'm trying to figure my next step in my real estate career

I need to make money to keep me afloat over this period.

And please don't read this as I'm not grateful for what I have. I've worked super hard to get to this position and I count my blessing daily. I just really want to keep the momentum going.

Thanks

What you've found out is flipping isn't the answer as a substitute for income...cash flow is, but you need to flip to get the cash to buy the cash flow.

This isn't a "Chicken and egg" scenario though.

Here's how I do/did it:

1 - Take your initial money (seed money) and grow it by flipping it and reinvesting the profit back into it.

2 - Repeat step until you reach a certain point (only you can decide this $ Number) where you no longer need to grow your seed money.  That's why you're reinvesting your flip profits...to grow your seed money.

3 - Continue to flip your "new and improved" seed money, but now instead of reinvesting it back into your seed money, use these profits to buy your cash flow properties.

4 - Continue to flip your seed money (never spend your seed money), and spend the profits on additional cash flow properties.

5 - Repeat until you have reached your $Goal for cash flow...then pocket the seed money...that you never spent.

The key is to:

A)  Never, ever "spend" your seed money.  Grow it, & "use" it to infinity, never, EVER, spend it.

B)  "Spend" only your profit...because if you follow Key #1, your seed money will continue to regenerate new profits upon every flip.

Transition to rentals and take the quick and easy flips as they come along. Local real estate meet ups are great for achieving this goal. 

Become a flipping Guru, hold seminars, sell DVDs, books, and bootcamps, annoy everyone with constant marketing, stop paying taxes, flee to a non extradition country and live out your life in fear of Uncle Sam finding you. 

@Peter M. Don't take up comedy when your real estate occupation fails.

20 flips worth of profit invested in short-term rentals should generate a lot of cash flow.

You are adding value and have a great strategy and experience...not sure what to recommend.  Maybe try larger apartments...more efficient, cash flow while units are 'flipping', and a lot easier.

Become a private lender and get 6% to 12% back on your money every 6 months.

@David Lant why not touch the profit from the STRs for 8 years? I’m guessing you want to pay off the properties with the cash flow from them within the 8 years?

@Tyann Marcink Yes that's true. I want also try to pay off the properties so I can use them as my personal bank. Also I have 6 kids and I like to know that I'm secure and have something to fall back on.

@David Lant there is always the option of using some of the STR profit for living expenses while using the rest for paying off properties.

Have you done STR yet? You know it can be a full time job, especially with numerous properties, depending on the level of hospitality you decide to provide?

Originally posted by @Jason Izzi :

Become a private lender and get 6% to 12% back on your money every 6 months.

 How does one necessarily become a private lender the real way? 

In my market they are always at the REI Meetups.

@Tyann Marcink I've joined with a management company as there out of state. The cost of the propertys is very large some I eager to pay off asap.

@David Lant where are they located? PS Congrats on entering into the STR world!

@Joe Villeneuve are you still flipping? I just sold a business after 10 years and just started flipping. I already own several rentals, but I’m applying your same strategy.

How long have you been flipping? Thanks for info 👍🏻

Yes, but with partners now.  My first flip was in the 80's.

There are a million ways to make money in this business.  Maybe eliminate the parts of flipping that you don't like and only do the part you do like? Property management is more of a grind but the reward is long term wealth.

@David Lant - it depends on your personal goals, and how much money you have available. Do you like being active in real estate, and being kept busy? There are some great suggestions above. 

If you are looking for more of a passive way to earn income, there are options out there to be an investor in funds that invest in real estate. 

Some funds require you to be an SEC accredited investor - meaning you must have either $1 million in net worth (outside of your primary residence), or $200k in income a year (or $300k jointly). If this describes you, you could have some lucrative options where you can invest in secured real estate, without doing the leg work/underwriting, and still make a very good return on your money. 

Originally posted by @Mike Zins :

@David Lant - it depends on your personal goals, and how much money you have available. Do you like being active in real estate, and being kept busy? There are some great suggestions above. 

If you are looking for more of a passive way to earn income, there are options out there to be an investor in funds that invest in real estate. 

Some funds require you to be an SEC accredited investor - meaning you must have either $1 million in net worth (outside of your primary residence), or $200k in income a year (or $300k jointly). If this describes you, you could have some lucrative options where you can invest in secured real estate, without doing the leg work/underwriting, and still make a very good return on your money. 

Originally posted by @David Lant :

I've been flipping houses for a few years now and I've done around 20 flips which in turn have allowed me to buy rental property's.

But between me burning out on flipping and the low inventory and the massive numbers of flippers and the low returns, I'm not seeing a solid yearly salary I can pull in from it.

I am planning to buy some short term rental properties but any money pulled in from them will not be touched for around 8 years.

So I'm trying to figure my next step in my real estate career

I need to make money to keep me afloat over this period.

And please don't read this as I'm not grateful for what I have. I've worked super hard to get to this position and I count my blessing daily. I just really want to keep the momentum going.

Thanks

A successful investor told me a long time ago when I wanted to get into real estate in 2016. He said most flippers don't take the next step and get into commercial real estate. They get stuck in that space and don't see a bigger play in commercial. I flip properties as well and I agree that it can burn you out. I would encourage you to move into commercial and buy and hold

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