I am looking into buying a house to rent vs finding a house to fix (appropriately, not put lipstick on a pig) and flip. I have construction experience and I already have 1 rental. Does anyone have experience in either in the current market and wouldn't mind sharing advice on what one might do in this regard. I have been comparing mortgages and expenses to repair costs and agent fees when selling. Its a tough decision in todays market near the north metro area.
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Real Estate - Flip vs Renting
- Thread starter Gcc0002
- Start date
Have you considered Section 8? Guaranteed recession proof rental income above market value.
If you do section 8, charge a few hundred more than section 8 pays, otherwise the hoodrats will destroy your property.
Weird how when they pay nothing that everything gets torn up, no skin in the game. Soon as they pay some out of pocket, stuff gets taken care of.
At the moment, I would rent it out if you can cover the mortgage. Rates are high and people are not buying like they were.
I'm a full time investor/flipper.
My business partner and I have properties in 6 states and have done dozens of homes, motel, nursing home, even stuff like an old jail and old bank buildings.
I have a general opinion and a market dependant opinion.
Generally- buying is best- you build equity, have tax benefits, (generally)no capital gains if you reside in a property for 2 years then sell.
Market dependant- it ALL depends on the numbers, your goals, etc. If you find the right deal - go for it. But (unlike commercial) residential is still overpriced in many areas (including ATL)
A few other thoughts-
* You can't (generally) flip a place you got with owner occupied financing without being there 12 plus months. Signing an FHA loan doc with the intention of flipping sooner is not legal (not saying that's your intent- just sharing info for those who don't know)
* We are buying a LOT right now- but mostly ROUGH commercial properties that won't qualify for financing , getting big discounts by paying cash, cleaning up (but not rehabbing completely) and reselling as is. We are only rehabbing/upgrading if we will get cashflow off it and are not counting on short term inflation.
*We are NOT buying near Atlanta. Not opposed to it- just not seeing deals that make sense
*For you (or anyone else) in this position- house hacking may be an option. IE- get a 4 plex (1-4 units qualify for single family financing) live in one, rent the others. As always- the numbers have to make sense.
Feel free to message with questions.
My business partner and I have properties in 6 states and have done dozens of homes, motel, nursing home, even stuff like an old jail and old bank buildings.
I have a general opinion and a market dependant opinion.
Generally- buying is best- you build equity, have tax benefits, (generally)no capital gains if you reside in a property for 2 years then sell.
Market dependant- it ALL depends on the numbers, your goals, etc. If you find the right deal - go for it. But (unlike commercial) residential is still overpriced in many areas (including ATL)
A few other thoughts-
* You can't (generally) flip a place you got with owner occupied financing without being there 12 plus months. Signing an FHA loan doc with the intention of flipping sooner is not legal (not saying that's your intent- just sharing info for those who don't know)
* We are buying a LOT right now- but mostly ROUGH commercial properties that won't qualify for financing , getting big discounts by paying cash, cleaning up (but not rehabbing completely) and reselling as is. We are only rehabbing/upgrading if we will get cashflow off it and are not counting on short term inflation.
*We are NOT buying near Atlanta. Not opposed to it- just not seeing deals that make sense
*For you (or anyone else) in this position- house hacking may be an option. IE- get a 4 plex (1-4 units qualify for single family financing) live in one, rent the others. As always- the numbers have to make sense.
Feel free to message with questions.
Being a landlord is not a passive investment and is a build wealth slowly game. House hacking is a great way to go. Mobile homes offer above market returns if you can deal with the tenants. Join a local REIA and learn as much as you can from experienced investors. Most flippers don’t account for taxes until they do their next tax return. 15% off the top cuts into your profit real fast.
Simply not true. Why would people who get free rent destroy their rental and get their free rent taken away? It is a section 8 myth plus were dealing with 900 sqft units that would cost about 2 grand to fully remodel. I am a section 8 investor.
There are scores of examples on the net cautioning about what happens with Section 8 housing. From the examples I've seen anyone with a Section 8 house shouldn't be renting it if they actually think they can eventually 'flip' it for a sale without first having to do some major repair work. IOW, starting off with a 'nice' house to start with and subjecting it to tenants you can't select and who really only pay a small percentage of their available income as rent (Section 8 covers the rest). The bare minimum of habitability standards just enough to pass Section 8 requirements and that's it.
I used to help my best friend rehab former Section 8 condos until we got tired of having to replace nearly every part of its installed systems (HVAC, plumbing, electrical, major sheet rock replacement, etc.) They'll rip out anything they can to sell it for crack money.
Here's one:
I swapped from HVAC to window ac units. YOU have the power to screen your tenants. You can deny anyone you like. Nobody with a decent credit score and no history of damaging property or evictions is going to tear your place up. There is a right way and a wrong way to do section 8.
