Flipping Houses vs. Rentals: Which Will Make You Richer TODAY?

[@biggerpockets]

Would you try flipping or renting in today's market? Let us know!

[@joescaparra1404]

My Financial Planner in ME tells ME that before you decide the strategy, you define the goal! So if you ask me; I am buy and holding all day long. The environment does NOT dictate my Goal especially if it is a 30-50 year result I am after! My goal is to provide predictable and sustainable income to sustain a high standard of living till the day that my wife and I die and then to pass on a substantial legacy for my children (stepped up in basis come into play). I call this financial freedom the moment it produces enough income to accomplish your income needs. The tortoise if I remember correctly wins the race! Flipping is the rabbit, buy and hold (you say renting) is the tortoise. Not sexy but gets the job done EVERY TIME! Once you get past about 5 years into this strategy it should be sustainable in any market condition. Not true if you're a flipper. Being a flipper is a job, being a buy and hold your utilizing OPM (Others People's Money) strategy to eventually be passive income or at least semi-passive. You also need to take into consideration RISK! Flipping is much higher risk! Property price fluctuates much greater than rents. Most renovation estimates end up costing more. We have all heard or experience people losing money on property through foreclosure, job layoffs, market fluctuations or combination of these events. When have you EVER heard that rents have dropped in half..........I was renting an apartment for $1000 a month and I went to renew and they said it is my lucky day and for the next year your rent is $500 monthly...........Never in my 68 years of living! Rents don't crash (unless your living in Detroit). Renting out a duplex for $1000-1500 a month won't have these issues! Two kids working at Mac Donalds earning $12 an hour can afford my rents! How many Mac Donalds went out of business during any downturn or any time in the last 50 years! Not enough to have any negative impact. Stay with relatively low income housing (duplexes) and buy and hold over long periods of time will serve most investors well! Walmart has got it right.........make a little bit of money off a lot of folks! Duplex investing: Make a little off a lot early on, and then; wake up one day and you will be making a lot off a lot! Don't worry about only making a little on each unit early on. The miracle of compounding time is the similar to compounding interest! If your goal is to live for today, flipping might work for you, but if you want to get Wealthy over TIME then Buy an hold works well! Cheers!

[@garettbates366]

@biggerpockets I would flip and have multiple times.however, I can rent an 800 to 1 million dollar house for 2500 plus bills. We sign 5 year morgage at most. My payment with 200 on a 1 million dollar mortgage would be 5000 per month. Ether flip or rent. Brrr will not work here.

[@Trenttabor]

Im 27, 5 houses currently, 4 of them rentals. Its a bout a 1MM in value - 70 percent equity and 30 percent debt. Im pretty happy with the cash flow but want to get more into flipping to get the big chunks of cash coming in as apposed to a few thousand a month. Owning rentals feels like slow money and it is, until you sell and get to see what you have accomplished. I think its good to have a base of rental income coming in since it is important to diversify your income and not rely on employers for 100 percent. But, after your base rental income is established, flipping as a more active income seems attractive.

[@Palantir_Daily]

Congratulations. That’s a big feat.

[@AllaCh-c5d]

Congratulations!

[@castlerc]

Flipping when you’re young yes. Just build your long term portfolio. I’m 54 and retired with 7. Worked for me. GL

[@gianthills]

How did you find your first?

[@improveyourself-selfimprovemen]

Congrats man. What me and my team are doing right now is flipping houses to make the brrrr strategy more effective and to scale our rental portfolio on a way bigger scale as we can refinance our rentals way easier that way.

[@Whatever0704]

Do both. Use rental depreciation to offset the flip income. Depreciation means nothing if you do not have anywhere to use it. Also really depends on your goals and age. VERY different if you are 25 or 60.. have a family or not. There is never a "right answer"

[@Universalview22]

That’s what I was thinking, start flipping and buy some rental properties with part of the profit.

[@Rogelio483]

Yes smart ​@@Universalview22

[@SergioB-MakingMillionaires]

I do the owner finance strategy. I think it’s a combination of both renting (passive income) and flipping (active income). Plus by selling owner finance I avoid all the headaches of changing toilets, chasing tenants for rent, and do not pay property taxes. I buy a property, sell it via owner finance with a down payment and then make an amortized note for the buyer. I do miss out on the appreciation, but at least I can rely on the more steady income coming in from my buyers. I am basically a mortgage bank with a house as a guarantee.

[@gokoronkwo]

We do both. We’ve been holding properties in Harris County since 2014, executing build to rent since 2017, and selling new construction duplexes since 2017

[@DanKohan]

Great video! The decision between flipping and holding properties can be a tough one. It's true that there's no one-size-fits-all answer, and it often depends on your financial situation, goals, and the current market conditions.

[@northcarolinaname]

It would be helpful to compare with alternative investments. Because it sounds like for most deals, the return is marginally better than passive index funds

[@butchgreene]

Considering he is doing rehab loans that are interest only payments and walking away 90-180 days later with a $30k net profit...hardly.

[@northcarolinaname]

@butchgreene ah i meant comparing buy and hold strategies. Because im coming to the conclusion that for most people, real estate only makes sense if its a fix and flip or you have an immediate value add opportunity. But many people think that buying a home is always better when there are many deals that end up being worse for you than the sp500 which is so much more passive

[@Jim_Lawrence]

The point at the end where you point out how much you have learned through the flipping experiences shouldn't be washed over. Every skill you can add makes you more valuable. Just think about how many go to college for money you could buy a house outright for, and gain text knowledge that they need to get a real job to learn how to apply. Not to mention college is an up front investment that you need to pay back over how many years? I personally agree that adding a flip(s) may be necessary to fund our next property, with rentals being the main goal.

[@wbawba4275]

Family frieds. Investers. Hard money lenders. You would have to have a big track record for hard money lender to finance 10 properties.

[@wbawba4275]

Great video. Keep up the work. Just found your channel will watch more of your videos.

[@TrendSettaRico]

Simple answer.....both!

[@JoseRodriguez-gr4tg]

I think the best way is to do both but not in a way that was discussed. When you flip you could 1031 exhange each one even multiple properties at once to get into bigger investments. This way you are increasing cashflow, rolling over taxes, and ultimately scaling much faster.

[@justenrider5051]

You have to hold for 2 years or have clear evidence you intended to hold a property to do a 1031 before 2 years. So, no.

[@deanmarten]

1031 is a pain in the arse and you usually end up over paying for the purchased house IMO

[@tucsonlaserguy]

Blue line is a step ladder. On year one is 300K, year 2 is 600K, year 3 is 900K, year 4 is $1.2m. This graph is flawed. $1.2m with current 2024 risk free rate is $60K/yr. As you mentioned tax benefits for rentals, there is also interest generation with the capital, whether it is risk free rate, or put into a property 100% cash, or portion of cash, etc. maybe flips for one year will accelerate funds in such a way that you can get multiple rentals faster than starting with 1 the previous year. Also a cap rate at 15-20% is not sometimes ng realist that I have seen, but possible in rare circumstances

[@ausquiano29]

Great stuff here. Thanks so much I will start now

[@leeroach3381]

Very helpful Thank you for sharing

[@garettbates366]

I'm just starting to flip houses in 3 years. I've done 3 houses. I'm in Canada, so I live in them as I flip them, which means no income tax. The average house in my area is 700 grand rent, which doesn't cover this amount, so flipping is the only way here. If you could cover the mortgage, it would be worth it, but it doesn't right now. I'm looking at a commercial property next. This will be worth keeping.

[@MarkSven888]

What part of Canada?

[@garettbates366]

@MarkSven888 I live in the Niagara Region.

[@joescaparra1404]

This is a tougher decision today than it ever was. Both flipping and finding good cash flow properties in this 8% and up rate environment is tough. However, if you have a long term vision and you have the resources than allow you not to have to live off your cash flowing properties for 10-15 years then buy and hold is a no-brainer decision. Going back 10 years ago in Austin TX I had the opportunity to buy a beat up duplex for 70k in a bad neighborhood. I could sell it the next day for 120k without putting a dime into the property or I could put 10k in rehab and cash flow positive 700 a month. The sexy decision would be to take a 50k one day profit and brag to my friends. However, the long term focus I took was to take the monthly cash flow and hold it. It now provides $2000 monthly positive cash flow and is valued at %550k. How many of you flippers look back and say to yourself, I wish I had kept that one!!!

[@Straight-Outta-Roanoke-AL]

What I'm trying to do is flip a few to build funds to invest in rentals. The problem is with just me working on the property and staying out of debt it's taking forever. I've been working on the same house for almost 2 years.

[@morganruest1803]

Let's get to flipping

[@zorina109]

Love your videos‼️😍

[@DerekDeVille]

Great video!

[@KennethLeeAtLGA]

If the rates are high then even home buyers cant afford to buy the flip

[@lifeandthoughts8317]

What about fix using hard money n convert the mortgage to conventional

[@elvispresley3234]

Depends on the deal. We are in a market (overall) where most will not cashflow or have appreciation. There is no black-or-white answer.

[@butchgreene]

We're trying to buy a home in a college town for our daughter ao that ahe can finish her undergrad & masters in one place. If we knew how to flip, could use that money as the 20% down needed. But no clue on flipping

[@AberrantArt]

Where would people get the money to buy 10 houses?

[@morgenglende-michalski369]

Lol save up or make good income! Or buy in a cheap market, I’m only 23 and I could get 2 or 3 houses in a cheap market

[@Way2fast4ya]

exactly lol.... more realistic for a normal Timmy earning $100k salary W2 job a year.... maybe can buy 1-2 homes per year at $250k purchase price = approx $50k downpayment cash each property...

[@AberrantArt]

@@morgenglende-michalski369 that's awesome. What do you do for work? Sounds like I need to switch careers

[@morgenglende-michalski369]

@@AberrantArt I work as an assistant community manager(not even the head honcho, I’m in 2nd place) for a large student housing complex. I highly recommend it if you have a high tolerance for BS and ignorant kids, I started as a leasing consultant and moved into this position after 8 months(generally u need 1-2 years before manager level cuz there is a LOT of liability). I get paid pretty well for the position, but it’s a great career with tons of jobs and an easy path up. General managers(head honcho) make between 60k-200k depending on the size of the property(s) they manage and how much income they produce(my boss makes around 80k salary, $110k total compensation package, for a 926 bed property, has no degree)

[@AberrantArt]

@@morgenglende-michalski369 that's pretty good. Congrats on the career so far. What markets would you be able to purchase 2 or 3 homes in? The interest rates right now are rough

[@profbshop]

if you are a closer from wolfstreet then flip, if you are a creator and thinker, then hold and sell.

[@awwskit9753]

It’s hard to flip homes with the current interest rates

[@hassanbazzi3545]

Well explained

[@Lovingmylife24]

Rentals seem like the better deal in the long run.

[@dhowto3005]

Thanks.

[@abdulla_mirpur_rei]

Smart!

[@lorettathai9713]

I need motivation

[@LooniJoose]

Im looking to get started, and I expect I'll have roughly $100,000 to get started. I must be looking in the wrong place. Lol

[@gianthills]

You can make offers without that much cash if seller is motivated.

[@JayLupe]

There's also some ways to cut down on money spent when flipping a home.. all you gotta do is a bit more research

[@KianieAbraham]

Then let out the information

[@sueandlarry3702]

1031 exchange

[@CriptoLion]

I stopped watching when he confused revenue with NOI (net operate income)

[@Shepherdservices317]

Where are u making 200k? Lol my flips will be like 40k profit if I'm lucky tour talking about big bucket guys

[@gianthills]

He means if flipping 3 homes

[@darkgalaxy5548]

Never, ever buy a flipped house. All you're buying is cheap shoddy repairs covered with a fresh coat of paint.