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Updated over 7 years ago on . Most recent reply

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Travis Good
  • Newmanstown, PA
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capital gains or cash flow?

Travis Good
  • Newmanstown, PA
Posted
Looking for some insight on a plan of action to my goal of becoming more free finance wise and timewise. With $50,000 available on a HELOC (floating interest rate) Would it be better to do a small scale fix and flip or 2 to raise capital to put as down money on a turnkey rental or would it make more sense to put about 20k of my HELOC towards a down payment with a reputable turnkey company in Memphis TN on a SFR (Midsouth Homebuyers) I know a lot of investors are interested in long-term cash flow over short term capital gains for various reasons. In my situation is cashflow still better then capital gains?

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Brent Coombs
  • Investor
  • Cleveland, OH
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Brent Coombs
  • Investor
  • Cleveland, OH
Replied

@Travis Good, if you can afford a fix-n-flip (in order to get closer to your goal of buy-n-hold), then why not skip the middle step, and go straight to: fix-n-hold?

Get my point? Cash flow will be about the same anyway, because you won't have to borrow the amount that you would otherwise have expected to profit on your flip!

As for appreciation, so long as you know what you're doing, you should be able to value-add enough extra equity to qualify to cash-out all your outlay again, upon refinancing!

[If you haven't heard about it, look up "BRRRR strategy" in the BP search engine]. All the best...

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