Where do you belong? Buy/Hold or Fix/Flip? Perspectives please.

[Ryan Chaw]

Hello BP members,

Please post here which strategy you prefer and why. 

Are you fix/flip or buy/hold? 

What are the pros and cons of your strategy?

What are some of your personal investments you are most proud of?

What kind of financing do you use for your deals?

If you are a buy/hold, what would you say the fix/flippers are missing out on?

If you are a fix/flip, what would you say the buy/holders are missing out on?

Who here uses a mix strategy?

Who here uses a completely different approach?

Thank you in advance.

[Thomas S.]

Like many I do both. It's a natural process to retain some properties and flip others. If you have a full time job I would concentrate on buy and hold. I would not say there are pros and cons per say since they are entirely different approaches to wealth generating. Primary difference is a pay me now or pay me later business but the trade off is that flipping is harder work and higher risk.

My personal investments I am most pleased with are those I purchase with 100% financing (seller financing) that produce solid positive cash flow. I do not like to see my money stagnating in real estate.

[Michael Hayworth]

When I started real estate investing, I had also recently launched a new business startup. I only had $20-30K cash on hand I found financing, flipped two, and used those proceeds to buy a third that I could keep.

Kept that strategy for a couple of years. As my assets and income increased, which also meant a higher tax bracket, I moved to a strategy of "delayed flips." I'll always have 25-30 properties in my portfolio, but now that I'm in the highest U.S. tax bracket, I focus on houses where my reno can add immediate value, and which are in areas likely to appreciate over a 2-5 year timeframe. I make them rentals for a period of time, and several times a year will sell one that I've owned for 2-3 years, leaving those proceeds taxed at long-term capital gains (20%) instead of regular income + Obamacare tax (44%).

Whatever I buy, I buy with an eye to appreciation. Cash flow is nice income, but it'll never make you wealthy. Appreciation can.