Buy/hold vs flip in okc

6 Replies

I am in OKC area and was originally looking to buy and hold. Now I am thinking fix and flip may be more profitable. The catch is I am only interested in paying cash for either rental or flip due to risk tolerance. After analyzing a few deals over the weekend it seems difficult to find deals that will net me more than 8-10% ROI (stock market average is around 10%). I feel for all my effort, if I don't make more than investing in mutual funds it's not worth it, sure it's a diversification strategy but still too much work. Are there deals to be had for a cash buyer that I simply haven't found since I am as green as they come or am I on to something when analyzing from a cash only basis?

One deal I found I as an example: purchase price 60k + 30k repairs = 90k all in. Comps selling for 135k. Net after agent fees approx. 32k-ish. Wouldn't it be better to flip than to have 90k tied up with house renting for 1250 per month?

What say you?

Most experts believe the stock market is high and will return closer to 6% per year over the next 5 years.  The last 3 years have been great.

I look for rentals that will give me 8% cash flow + 2% to 3% appreciation.

I buy flips which will profit 20% over a 6 months period.

For most deals I have had to invest out of state.

The flip that you mentoned would give me my 20%.

Good Luck.

Bill

@Eric Noland  

Don't forget to factor in the time when calculating your return.  If you can do 2 flips per year with that money, your return doubles. 

What part of town are you interested in?

Zach Sikes - I was originally targeting the village area but this house popped up in NW okc (Putnam city) and looked like a good opportunity. I also like that it was built in late 70s as opposed to 50s.

@Eric Noland  

Are you wanting cash now or long term cash flow? You can always rehab and rent then set up a heloc on the property to buy more or flip more. 

watch the pc schools areas.  they can be a bit spotty.  some hold value great others are struggling a bit.  

Looking long term (early retirement). Have plenty of cash flow now with day job but would like to be rid of it before 65 ;)

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