Fight of the Century: Flipping vs Buy and Hold

Flipping vs RentalsThe fight we have all been waiting for is here people!  “The Fantastic Flipping” verses “Boring Buy and Hold” aka “Rentals” is set to take off tonight for an EPIC battle.  Anticipation for tonight’s MAIN EVENT has been building up for years.

 

Buy and Hold aka “Rentals” has been holding out for a long time, working its way up the ranks through a steady, stable and a slow wealth creation.

Flipping has come on to the scene strong, destroying opponents left and right, making guest appearances on numerous reality shows and really building up its fan base while making tons of money.  Flipping makes it look so easy folks, its hard to see how Buy and Hold will hold up tonight.

It will be one of the greatest bouts of all time and much of the world has their eyes set on this match here tonight and there is a lot of money riding on this fight.  Grab your drinks, popcorn and enjoy the fight!

 

 

 

 

 Lets see who wins!!

 

 Flipping VS Buy and Hold

FLIPPING

BUY AND HOLD

FIGHT OF THE CENTURY:  LIVE FROM CASHFLOWDIAIRES.COM

ROUND 1:  Finding Properties

 Harder to find deals.  Need a super discount to make a good profit.

 Easier to find deals.  Not having as many expenses (selling) allows a higher purchase price.

 ROUND 2:  Financing/Rates

 A lot of cash needed.  Difficult to get financing.  Hard money is best option if you don’t have tons of cash.  High interest rates.

 Conventional financing available.  Use Leverage!  20% down is all that is needed.  Lower interest rates available.

ROUND 3:  Cash Money

 One Big Lump payment at the end.

 Long term cash flow forever.  Appreciation gains and principle pay down.

ROUND 4:  Holding Costs

 Takes longer to sell.  Holding costs higher.

 Faster to rent. Holding costs cheaper.

ROUND 5:  Rehab Costs

 Need expensive high-end furnishings for a good flip.

 Can use rental grade quality furnishings.  Save tons of money.

ROUND 6:  Taxes

 Less deductions available.  Short term capital gains.

 More deductions available.  Depreciation.  Long term capital gains.

ROUND 7:  Market Fluctuations

 Susceptible to market fluctuations when trying to sell.  Can kill a deal.

 You can ride out market fluctuations, continue getting cash flow!

ROUND 8:  Long Term Result

 You are working for money.  Might as well have a JOB!

 Money is working for you.  Passive Income!

 

Ladies and Gentlemen!!! Buy and Hold knocks out Flipping early in the 8th round!  After dominating what appears to be all the rounds, what a devastating way to go down for Flipping!!   What a fight!!  Vegas odds had Flipping as the clear favorite.  Boy were they let down tonight folks.  “Rentals” proved tonight that slow and steady wins the race.   Will there be a rematch?  Stay tuned.

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Hope y’all had fun with this one folks.  Keep in mind, this is a biased opinion here coming from me because if you have been reading my blog, you know I love me some rentals!!   If I wanted to, I could make a chart showing the exact opposite.  But I don’t want to because that would go against my beliefs!  And if did that, I would end up in a fetal position crying myself to sleep at night because I didn’t let the world know my true feelings!  I don’t want that, you don’t want that and my Mother doesn’t want that!  Yes I bought my Mother into it.  She knows best!


On a more serious note, I do however advise all of you to be very cautious when investing in Real Estate using any method.  It’s not easy and requires a lot of research, trial and error and a lot of education about how it works.  You can’t just flip any house or make money off any rental.  But you knew that already! 😉

If you are interested in investing in Real Estate then it would be a good decision to determine if you are going to be a flipper or a buy and hold investor.  These are the two most common methods of investing in real estate.  Don’t get me wrong though, there are tons of other ways to invest in Real Estate and many savvy investors utilize as many different methods that they can.   I choose to invest in turnkey rental properties because I feel that it is an easier path if you don’t have the time to get your hands dirty.

What do you prefer?  Flipping or Buy and Hold?




 

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7 Comments

  1. Buy and hold lets you set and forget for a while (sort of…). Flipping is a constant work, like a job. When you want to finally ‘flip’ the rentals, you can.

    If you are in the middle of a flip, and the market tanks, you could lose a ton of dough.

    Both have their advantages. I prefer buy and hold. And when I sell, I have long term capital gains, or will recapture some of the depreciation.

    • You make a great point NNL. You can always flip the rental whenever you want. I personally would rather keep the monthly cash flow coming but having that as an exit plan is awesome. I should have added that.

  2. Haha nice analogy here CFD! It’s great how you told a story, interested to know what you’re doing as a day job, feels like you’d be good at doing something creative 🙂

    Okay back on topic, for me buy and hold is more of the way to go due to it being less time intensive however there is definitely merit in flipping & “potentially” higher profits in it however it generally involves more effort and due diligence.. I’m probably along your lines of thinking i.e. going with buy and hold!

    • Thanks Jef! I thought this one pretty clever how I did it. I work at a software company now in the development dept during the day. Will keep working that until I build enough passive income off of my rentals to retire.

      I agree, flippers can make a ton of great money and I know a few that are. But it takes a lot of work and patience. And if you have a full time job like I do then its just not feasible. Buy and hold is where its at for me too!

      • Hmmm awesome CFD, I’ve still yet to send across you a note I will get there though haha! 🙂
        Definitely keen to watch you hit/smash your goals and I see the potential to collaborate at some stage, I’ll be kicking off my own site/business soon

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