hi everybody im a new member here. im bearly getting started in realestate investing. i was just wondering how all the pros out their make their money is it by renting out ( my choice) or by fliping. i would eventually would like to get some apartment complexes way down the line because i know they cost up their in the millions well any information would be highly appreciated
Hi, sounds like you are wanting to get into rentals. My experience is in flipping, but I would like to get into renting. Read all you can on landlording on this site and in books and talk to others that rent and know your state laws. I hear it pays to be able to be firm and consistent with people and to screen screen screen. You need to maybe start with some goals and ask yourself some questions.
where do you want to invest
what type-sfh, multi-family units, apt bldgs, commercial property
do you want to invite a partner or two in to work with you
what price range are you looking at in purchasing a property
Not an expert and I don’t claim to give all the answers, just some suggestions to get you thinking. Graciez
You really need to do your homework to see whats involved with flipping and being a landlord, both are great. To build true wealth you really need to hold onto your assets. Rental property keeps you green in the event of downtime, vacation time, or just I want to take a break for awhile time if you have others handling your management of the properties. The tax benefits are also pretty good for being a rental property owner.
Flipping is good for fast cash if you do it right but it also robs you of your wealth in the way of taxes/closings/fees broker fees for the sale and on and on.
I believe the best way to go about real estate investing is to buy it right 50-60 cents on the dollar fix it and then refinance it and rent it. in doing so you pull out your investment plus some cash to put back into another property, all tax free and all the while your tenant is paying off your investment which if done right you have none of your own money into it and a tax free income after write offs. Its not as easy as I just made it all sound but there are plenty of threads on this website where you can learn the different aspects of flipping and renting. The TV shows arent what they seem…
To make an intelligent decision, first you need to define your goals. Then, you need to become thoroughly familiar with both the positive and negative aspects of both renting and flipping. What you’ll find with the TV gurus is only the most optimistic scenario. Unfortunately, they omit the real world expenses and real world problems associated with both strategies.
You should also evaluate your personal situation. Are you broke with terrible credit, or do you have excellent credit and some cash. Are you willing to work HARD to get your business started? Unlike the TV infomercials, starting any business is a LOT of work.
Good Luck,
Mike
In my opinion renting is the way to go.
There are numerous ways that owning rental property make you wealthy.
Appreciation
Building equity by tennants paying your mortgage
Cashflow
Tax write offs
The ability to gain instant equity by purchasing properties at 70 cents on the dollar or cheaper.
Thats 5 ways to make money with buying rental properties.
With flipping you just get your chunk of money and get to pay instant taxes on it, commisions, closing costs…While fliping is a good source to build up working capital it is not a real good way to build true wealth in my opinion.
Good luck
Do both, who says you have to choose?
I am a second generation real estate investor, have lived the benefits of renting long term and am now in the process of gradually “cashing out”. After decades of landlording, I want little to do with it at this point. You have to know yourself-your skills and personality, the time that you have available etc. Since you are just beginning, you may want to consider going for that apartment complex sooner rather than later. They are easier to aquire than you may think when you understand commercial financing. A large apartment complex is easier to aquire and manage than a block full of houses.
It all depends on your market. Cleveland is not a flipping zone but holding the new foreclosure purchases while renting them out is a good way to ride a bad market. If the appreciation doesn’t make you money from lack of demand, why would you want to sink money into a property to pay a ton of holding costs. Analyze the market, do your homework on every aspect, do your homework again, follow your will for this…are you a GC kinda guy or are you an analytical person looking to run numbers and put them to work for you?
Cheers,
G