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Well, today should be a fun day… we’re going to talk about flipping homes.
I’ll break down the numbers on a flip, and we’ll see if it was worth it or not. Remember that savvy investors understand you win on the BUY, and not the sell, and there’s a lot inherent risk in any flip.
I’ve always believed that the right way to build wealth in real estate is with cash-flow positive rental units, meaning your income every month offsets all of your current and projected costs. It’s a slower build, but the fire will burn for much longer than a flip. In fact, the right property can keep you warm for your whole life.
I would rather have the home that I purchase pay for itself plus a little more every month… no matter what. If the market sucks, it doesn’t matter because it will carry itself. If the market’s good, then I can refinance and go buy the next one. It’s the safest, most predictable way to invest in real estate. Will you get a crappy tenant once in a while? Maybe, but if your numbers are good enough you can be “hands off” and hire a great property manager to deal with issues.
Buying new construction as an “investment”? I’ve seen it fail too many times – to me, this is the equivalent of going to the casino and betting on black or red. It could work, or it could be a disaster.
And be sure to check out Knight. It’s a great price point for a double garage, in a marketplace where $600k is now getting a single-car garage.