Is house flipping a good idea?

[Alberto M.]

I have been acquiring rental properties for the past two years. I partnered up with a good friend from college and now we also manage other people’s rentals and find deals for them. I have built a strong team and now have some free time.

I have been considering start flipping houses as I have the time, energy and resources. But I also understand the risk behind it and it would be my first time doing it.

I am not sure if I should keep doing rentals or try out flipping a house.

My downside on the first option is that I will be running out of cash after a couple houses (with leverage of course) as the money will sit there. As opposed to house flipping that I can continue to do it over and over again.

What are your thoughts on this? All advices are appreciated.

[Brian Pulaski]

I take house flipping and rental property owning as two very different things. Personally I flip, but don’t think it’s a good flip for everyone. There is a much bigger question mark of whether it will sell and make you money, verse a rental that will most likely always be rentable (whether making good money or not). 

Another thing, in the current market, flips are getting snatched up with such little profit margins, you will most likely need to be all cash to do the deal and that draining of the bank account with no guarantee when and how much comes back in also isn’t for everyone.