Starting a flipping business vs working as a RE agent for active real estate income

[James Park]

I agree with J Scott that there is both passive investing (buying and holding real estate for long term wealth building) and trying to build an active real estate business.

Between working as a real estate agent vs starting a flipping business which business is more scalable in your opinion for active real estate income?

As a real estate agent you would spend your time generating leads for buyers and I would assume that flippers spend time in generate leads in REO and short sale properties to flip for a profit. It also appears that one cannot be a one man company in a flipping business, where a team is mandatory whereas one can work alone as an RE agent when starting out.

Compare the two businesses? Which business is easier to scale and easier to start. What are the pros and cons of starting flipping business compared to starting out as a real estate agent. Is one easier to build than the other?

[Jennifer B.]

Hi James,

I wanted to chime in and let you know how I run my businesses. I started off building homes, and then got into selling real estate as an agent. Once my regular business was built up I started working with investors as well as flipping myself.

My real estate business sold 47 transactions last year (2nd year in business) and I flipped 17 properties.

This year I will flip/build a similar amount of properties and close 60 transactions as an agent.

Currently, I am a one woman show. I do leverage my time by hiring great contractors, design consultants and I do my own marketing.

I also own rental properties and get great cash flow.

My goal is to diversify in an area that I know, real estate. In my opinion, it is a little risky to either be just a real estate agent or just an investor, unless you have a proven system and are doing a high volume of transactions.

The other nice thing is if there is a lack of inventory for investing (like I am seeing currently in the Seattle market) that usually means regular real estate is booming so only a portion of my entire business may slow down. There are often times where I am being an investor that can also get me paid or benefit my real estate business, so the benefits are two fold.

It can definitely be difficult managing both worlds, but I believe once you find your niche or a system that works you can do a lot of business and also have a lot of fun!