Buy and Hold for rentals vs Flips

[Herb Mitchell]

With the REO prices on the increase, and wholesale deals harder to find, I am at a point where I need to decide if I had the funds to purchase rental properties vs. flips were the margins are not as good. I am using IRA self directed funds so tax depreciation and capital gains may not fall into my decision. I can probably get a CAP rate of 12-15%. Thanks for any suggestions.

[Micki M.]

Herb, I think the decision to purchase rental properties simply because flipping isn't giving you the margins you want needs to be more closely examined. What is your goal short term and long term? Do you want to be a landlord? Does your timeline for return support that? Do you need a certain return from your funds - there are more ways to get that than holding rentals.  Even within real estate diversification is important.  If your flips are dwindling, it's a great idea to consider buying rentals or notes or doing some private lending to people in areas where flipping is still viable.