Strategies: Flip and Hold
Posted on April 10, 2006 - Filed Under My Strategy |
A new category has been added to my listing called "My Strategy". I’ve
been asked several times by people what my plan, my objective, my
strategy is.
My overall real estate strategy: Flip and hold.
My first piece of real estate was a dump. It was also investment property. My idea: fix it up and sell it for a tidy profit. If I could get 100% cash on cash back, I’d be ecstatic. Well, I’ve exceeded that.
Using the 1031 tax free exchange, I’ll use the proceeds to purchase my second property. This will also be investment property. It will also be a dump. This property, I will fix up but I will hold (not sell). I will burn in hades before I give this property up.
With the equity from the 2nd property, I will purchase the third. It will be investment property. It will also be a dump. This property, I will flip.
From the third property I will purchase the fourth, which I will hold.
And so on, and so on, and so on.
In a nutshell, I will flip every odd-numbered property. Using the 1031 exchange, I’ll purchase and keep every even-numbered property. I’m fortunate in the fact that my real estate agent is intimately acquainted with the 1031 process. That makes everything much less painful.
With a smile, I want to point out that I never once said "I’ll save my pennies from my paycheck to buy property." Real Estate buys Real Estate.
Don’t believe me? Ask a ninja.
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