Flipping vs Fixing vs Investing
Posted by admin in How To Flip
I’ve just read Dan Melson’s article and I couldn’t have written it better myself. Here’s a quick excerpt:
A true flipper is looking for a quick turn on the property, usually without much work done to really improve the property. They don’t typically keep the property and rent it; they’re not willing to accept the work of being a landlord. They make their money off of desperate sellers and getting a very low price for a property. Typically, their profit comes from how far down they can drive a desperate seller.
A fixer is someone who is looking to make a profit by making the property more attractive. By making it more attractive, they are able to sell for more money. They typically sell when the renovations are done, although many will wait for a full year to gain better tax treatment. They do not typically rent the property out, although they may live in it while it’s being renovated.
An investor has the idea of buying and holding for a certain period of time, usually leveraging rent to make the payments, sometimes breaking even, preferably with positive cash flow, usually while eventually hoping to cash in on capital appreciation, but always holding for periods that start at two years and go up from there.