What to do with buy and hold

[Cody W.]

As I was pondering today, I was thinking about buy and holds. Do you make money in the end? Say you buy a property for $200k and put $20k down and have a 15yr mortgage. Now if you cash flow $200/mo, obviously you will make money if you own it and cash flow it for 15 yrs+the extra time to pay off the $20k down. But how do you make money if you dont plan on owning it for 15yrs? Sell it for the remainder of the mortgage+extra as profit? I understand how to get money monthly but how do you profit when its all over? Hope my question makes sense. Any help would be great.

[Dave Foster]

Hey @Cody W.,  An EMT from Tampa?!! That's awesome!  We need to hook up.  My son is needing some ambulance ridealong time.  He's thinking strongly about EMT to Paramedic to Doctors without Borders.

There's a lot of different aspects to this question and different answers for each individual.  The best path for you lies in the unique balance for you of all the factors including

1. The amount of time you do own it certainly impacts everything.

2. The monthly cash flow multiplied over time.

3. True opportunity cost of the down payment

4. The amount of appreciation realized during the time you hold it.

5. The tax benefits while you own it.

6. The tax mitigation when you sell it.

7. The tenant paydown of the mortgage while you own it.

8.  the transactional costs for buy and hold vs flips.

9. The opportunity to access equity on properties held when other opportunities are found.

10. End game strategies including turning tax deferred to tax free gain and estate planning and passive income strategies.