Is house flipping a smart way to jump into REI?

[Gabe Morrell]

Hi BP Community,

My wife and I are looking to get into the REI game and exploring our options as to what our first strategy could be. In talking with people already in the game, many have told us that long term rentals right now are not a great option due to high home prices and higher interest rates; they would be very hard to cashflow aside from a sizeable down payment.

What these same people have recommended is fixing and flipping right now, since homes are still selling. One BP community member I got lunch with yesterday told me successful flippers avoid minor cosmetic repairs such as paint, trim, floors, etc. due to a glut of investors all trying to do the same. They instead focus on fully gutting their projects and install entirely new kitchens, bathrooms, fireplaces, accent walls, etc. and any exterior or mechanical upgrades necessary.

While I understand this whole hog strategy, part of me says this will end up increasing the value of a home so far beyond other homes in the surrounding area that it wouldn't sell for what it's likely worth. (maybe this is area dependent?)

For any successful flippers out there, what strategy have you found the most success in? Minor cosmetic repairs only? Full interior gut and remodels? How did you get started in with the fix and flip strategy?

And finally, do you recommend a fix and flip as our first REI endeavor? We both have some home repair skills, but would likely need to hire out larger work such as electrical, plumbing, roofing, siding, etc.

Thanks for the help!