Land or House Flip?

Question

Hello!

This is my first time here =) I am just getting started in real estate, with the end goal of replacing and exceeding my current salaried job. I have 80k in cash saved and do not know which avenue to take...I have been listening to the bigger pockets podcast, and want to find my niche, but also want a quick ROI on my first deal. I am considering flipping a home or flipping a piece of land, but I do not want to take out a loan. I live in a small town in between Austin & San Antonio.

Any advice/tips would be greatly appreciated!

Thank you

Shawn Parsh · Answer

Reagan

I see you have already been given solid advice, but I thought I would add my input. I do not know your market, but I would look into what distressed single family houses costs in your area. If you can buy a cosmetically distressed property for under 80,000 and still have either the income or cash to complete the rehab that is one option.

I live in a small town and the last three distressed properties I bought were 50,000, 65,000, and 55,000. All three needed significant rehab, but I would look and see what you can find in your area.

I would be careful with trying to flip land. From my experience it takes longer to sell. I have also developed land before and installing roads, curbs, sewer, water and so on gets expensive. The idea of buying land and adding wells on each lot would likely not work with the money you have. I just had a well installed last year and it costs 25,000. That was for one well. Good luck.

Justin Brickman · Answer

Hey Reagan, if you need help finding a property to flip with the $80K, feel free to reach out and I can assist you. It may be a little difficult flipping a home if you don't want to use a loan, but we can still see what's out there.

Jacob Sherman · Answer

with that budget wanting to operate in cash i would buy a raw piece of land to get it shovel ready with plans and sell it to a developer or potential home owner looking to build a home on that lot

Chris Marroquin · Answer

Most investors start w/ wholesaling.  You may not make a ton but you'll learn how to find good deals.  From there, the typical evolution is flip/brrr SFR 104 properties (much more liquid than land) but really depends on what you want your niche to be, have seen plenty of guys focus on wholesaling/flipping land and finding success.

Celia Lumbroso · Answer

Hi @Reagan C.

If you do not want to use a loan, only have 80K cash saved, and want a quick ROI then I would pursue the land route.  Buy vacant land, split the lots, add on water wells, lightpoles etc and then sell it to a developer.

If you have no experience fix & flipping you will likely encounter unexpected and inflated costs especially with the current market.

Reagan C. · Answer

Thank you for your Reply, Jake! I should have mentioned in my first post that we just built and moved into our home. We purchased our first home in 2017 in Austin, TX, and sold it in 2021 for nearly quadruple what we bought it for. We used most of the cash to buy our land and build outside of the city with no intentions of selling or moving!

I'm looking for a way to make my 80k cash grow and use to create a steady income stream.

Jake Baker · Answer

@Reagan C.

The best option is House Hacking for your first property. You get the best financing, other people pay down your mortgage, and you can live there for 2 years to take advantage of the 2 of the last 5 year rule.

When selling a primary residence property, capital gains from the sale can be deducted from the seller's owed taxes if the seller has lived in the property themselves for at least 2 of the previous 5 years leading up to the sale. That is the 2-out-of-5-years rule, in short.

Land or House Flip?

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