Investor · Apex, NC · Member since 2014 · 340 posts · 188 votes
Hey BP
For the last 6 years we have been flipping and building full time and converting 1-2 units a year over to our rental company in the Raleigh/ Durham area. Recently we have decided to ramp up our rental property holds through new construction and flips. Luckily, we employ a construction manager and an admin that help us out tremendously. The problem I am running into is if we convert all these flips and/or new builds over to rentals then we don't make any income and I can't pay myself or my team. The only thing I can think of is when we refinance them we pull out enough money that we can pay our staff.
Im hoping someone has done this in the past and can shed some light on a better way.
Currently our cash flow from rentals does not pay all the bills. We don't use any of it to live on actually, just let it build to help buy the next one.
@Uriah D. It's a great "problem" to have! I don't think there's a magic bullet to solve the fact that rental income is a loooonnnggg road to prosperity and may not pay enough to keep the lights on short term.
@Adam Schneider you are right. It’s a great problem to work through. Originally we were thinking it would be a long road play, but the more I consider it the more I think maybe it can be more than a long play. It could be a 3-5 year play? 5-7? Who knows. Hoping someone has pivoted on here before. If not, I guess I’ll write a BP book on how to do it when we are done!
An investor I know back in Alabama made a similar shift. But as far as I understand his process, he built and owned the properties outright and financed the sale. Keeping the residual mortgage payments are similar to rents. I'll try to think through it and get in touch with you are the next meet up.