Should I Flip or Rent?
First off, it depends on you. Do you want to make a quick hit, flip something, make a chunk of change and move on OR are you in this game for the long-term rental cash flow year after year? That’s what you have to ask yourself. This may be determined by your personal financial status – you may not want to make a big chunk of money right now because you have enough cash on hand. You may want to just build wealth over time. If so, do rentals! If you’re looking to make $10,000-$50,000 quickly to put yourself in a different income bracket, then you may want to flip the property.
Here’s our trick: When looking at our flips, we analyze them from a rental standpoint as well. We never want to get involved in a flip that we can’t maintain our costs (mortgage, taxes, insurance) with rental income if the market crashes or if the property doesn’t sell. We REALLY want to make sure that it still makes money so no matter what happens – whether we flip it and make a chunk of change or we get stuck with the property – we’re getting stuck with a money-maker not an income sucking loser.
BONUS QUESTION: How do you keep your contractors on their timeline?
The answer is simple – LOVE AND FEAR! When dealing with a contractor, you have to make sure that 1. They love you: they love the fact that you have multiple jobs for them, you’re going to keep hiring them, and you’re looking out for their interests and business to keep them working. The fear portion comes by withholding and structuring contract payments. They should always be chasing a MAJOR final payment to get complete with the job. DO NOT overpay up front because a lot of contractors will walk unless they’re always working for the big final payment and they know that you hold that over their head. When that’s the case, they’ll keep working until the job is done!