is there room anymore?

[Chris LumLee]

I'm new to real estate investing. I have one rental unit and was looking for more but not long ago a friend recommended that I pursue fix-and-flip versus buy-and-hold because if done well it would get me "cash in the pocket". So the question is...and I know this will sound stupid...is there room to do this anymore or is it already overcrowded?

[Joe Villeneuve]

First, stop listening to your friend.

Second, why wouldn't there be room for it any more?  

Third, the location for my statement number three is found in your ability to analyze and find the micro markets where these properties are found.

Fourth, and why I said "stop listening to your friend", is his/her comment about "fix and flip" putting cash in your pocket, is short sighted.  Yes, F & F does put cash in your pocket...and it stays there, right up to the time you spend it...once.  Then it's gone.

Hold properties, rental/cash flow properties, do the same thing...repeatedly, month after month.  If you buy them correctly, meaning you get your cash back out of it ASAP to use on the next property, you can still keep the property ...and its cash flow, coming every month.  The ability to get your original  ash out ASAP allows you to buy more of them.

The correct answer is you will be doing both.  You "flip" for the profits.  After every flip, you reuse the original cash on the next deal, and accumulate the profits enough to buy "Cash flow" properties.  The "machine" keeps reusing the same original money, but generating new profits, so you can keep buying new cash flow properties.

There's a more advanced way (not complex or hard though) that allows you to put this on steroids.