Flipping house with a primary household loan

[Joey Llamas]

Hey guys!

I was wondering if anyone knew if I could purchase a home as a primary residence with the intent to flip it? Only reason is because of the low down payment options. 

I’ve seen on podcasts that you need to be a primary resident for one year which is why I wonder if you can sell a primary in less than a year?

[Eddie Brady]

Hey Joey,

Technically, you can sell your primary residence in less than one year but you'll get hit with short-term capital gains tax. That usually wipes out a significant portion of the profit, if not all of it. The reason investors are able to avoid this tax on investment properties is that they can use a 1031 like-kind exchange which defers the capital gains tax. 

This might not be the best strategy for you.