Wholesaling vs. Buying and Holding

[Jessenia Munoz]

Hi all! I'm coming back with an update (a little shift in perspective from my first post) and also some tips/advice.

I initially came to BP with the a goal of buying and holding MF units in the VA Beach and Newport News areas. Due to the fact that I don't have the capital, I approached my dad because he's had some (failed) rental properties and experience under his belt; not to mention, the capital. Now, although he has the money and experience, I have sufficient more "book knowledge" and have done more research that can supplement his experince. I told him that if he puts up the capital, I'd be more than willing to do all the due diligence and work that it would take to find the deals, tenants, find contractors, etc. without his paying me because I would gain significant experience in the process and simultaneously, he would profit. After some more conversation with him, he mentioned he might look into wholesaling as opposed to rental properties because theROI on rental properties is very minimal (and I don't disagree). Like stocks, rental properties can be more of a long-term investment whereas with wholesaling, one can make quicker money in larger amounts. Both avenues require a substantial amount of work, both require time and effort, both require a set of skills (different for both), but with rental properties, one can expect a steady flow of income (hopefully), every month, on the same day, with minimal work. With wholesaling, if one isn't actively searching for deals and bringing people together, there's no cash flow.

These are juse speculations based on research I've been doing and people that I have talked to because again, I don't have a bit of actual hands-on experince under my belt. Any tips on which route I should look into pursuing or is this more of a personal, subjective decision?

Thanks in advance for the input! :)

[Kevin Siedlecki]

@Jessenia Munoz. Your exploration of the ideas here is all valid. I stick with buy and hold for a few reasons. 

1) Passive Income: My money, not my time, is making me money. Yes, I am putting time into looking for new places, making offers, doing the books, etc., but I have hired a property management company that takes good care of things. Sure, you could call owning rentals a job, but it's not a job the same way wholesaling is a job if you're looking to make equivalent money.

2) Taxes: Plenty on other posts, blogs, podcasts about that - no need to explain here.

3) Long-term wealth building: Each property I buy adds to my monthly cash flow and to my long-term net worth. If I were to make a quick four-figure check on a wholesale, that does nothing for my long-term wealth until I invest it somewhere else. I am back to square one, having to put all the same work into finding another wholesaling deal. 

So those are my reasons for sticking with buy and hold rentals as opposed to wholesaling. Who has a different perspective?