Ah the age-old question, should I flip or should I hold?
Having been in real estate for quite a while now, here is what I have seen and heard.
In order to sustain the “house flipping lifestyle” as some people call it, you need two things.
A buyers list of investors looking for a deal, a fresh supply of new leads coming in from people who need to sell their property fast.
The latter is the hardest asset to build.
To be successful, you will need endless advertising either online, in newspapers or using bandit signs, to find people who need to sell fast and might be willing to take less for their property.
Building a buyers list is fairly straight forward. You can attend real estate investor meetings and join clubs. Make some contacts and go out and find deals. Many people do this and a few are successful at it.
Some professional house flippers can get a home under contract and either do a double closing to sell to the investor, or just sell the deal/contract for a flat fee.
Buy and hold.
To be honest this is my favorite method of investing. You will need a few assets in place to be successful.
#1. Find a good contractor to help you repair the homes.
This is a must. I have seen many a deal die because costs of remodeling go way over budget or the contractor quits and doesn’t finish the job.
If you are not able to make repairs yourself, make sure you find a contractor who will be your team mate.
#2. Find a good real estate management company.
You will most likely be renting out the property after you finish making repairs. Getting calls at 3 am because a toilet is clogged is not the way to have a successful investing career.
#3. Find the deals.
It is easier in my opinion to find fix up properties versus flip-able properties. You can generally get a good deal on a home that needs repairs, fix it up and get it rented out fairly quickly.
A good way to do this is use hard money to buy and repair, then refinance into a traditional mortgage and let your tenants make the payments.
Buy and hold will build wealth for you over time and could make a nice retirement nest egg.
The trick is to have enough monthly cash flow to pay the mortgage and the management company.
Even if you are breaking even, you are building equity as the home increases in value over time.
He is also 1/2 of the "Two Mikes!"
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