24 MONTH FLIPPING

[Frank Rodriguez]

I have been using the term “24 month flip” for so long now, I believe I have coined the phrase. In fact, for the purposes of this post I’m more than happy to take ownership of it, because this is an investment strategy I preach to all of my clients as well as use myself.

If you, as an investor prefers the conventional flip, I am not here to tell you that you are wrong. I merely want to express my approach and share with you the benefits of the 24 Month Flip .

Basic Ways Of Making Money In Real Estate

1. Buy & Hold (Rental): Purchase a property in lower income neighborhoods, invest very little upfront and each month you collect a check. Again, this is the basic nuts and bolts on how this is done. Obviously there is a little more to it.

2. Flipping: You have seen the shows, and may have done a few yourself. This is when you purchase a property low, fix it up, make it shiny and new then sell it for a profit.

Now without getting into, short term rentals, tax deeds, commercial, etc. this is the basic way of making money in real estate. What I propose to you, is to have your cake and eat it too.

24 Month Flip: Get the buy and holds with equity growth… Don’t sell it off in 3, 4, 5 months. Purchase a property in a higher end neighborhood. Look at what is being built around the community, the schools, etc. After purchased, and rehabbed you put a renter in place. Your returns will be a little bit less, but you will sit back and enjoy the benefits and security associated with inherently much better rental clients.

In todays market buying a property and flipping it in 24 months you will pay a 33% capital gains tax. By holding it for 25 months or longer, your capital gains get cut in half. Not only that but in those 24 months, your equity has had time to really build, and you have had tax benefits. Isn’t this beautiful? When a lot of investors, especially new investors think of a flip, they imagine purchasing a home and flipping it quickly and making 25-50k. I say hold it and reap all of the benefits.

Here is an example: Lets use a 3 Bedroom, 2 Bathroom, 2 Car Garage Pool home in Seminole County( ORLANDO, FL). Rehab is 10k and the ARV (After Repair Value) is 190k. Rent is $1500/Month

Again, this example is using just basic numbers to give you a general idea of the “24 Month Flip”. Should you want to get into details, reach out to me and let me show you some examples from my clients as well as my own personal properties.

Written By:

Brendon Spalding

[Cal C.]

My understanding ('m not an accountant or tax professional) is the IRS decides whether or not you're a dealer (flipper) using several factors and a key one is intent.  Posting on a website under your name your intent to flip after 24 months of renting certainly doesn't seem like a good idea to me.  Just saying...