As a REALTOR®, I get a number of buyers who want to get into flipping houses. But while flipping can be quite lucrative some buyers don't always have the capital to invest in order to make it happen.
So what can you do?
Start by flipping your primary residence. Find properties for you to live in that need work, purchase, and then renovate them. There can be a number of benefits to flipping a primary residence as opposed to an investment property, but you would have to keep in mind that you're going to be living in a project; and flip projects are not the most comfortable places to live.
First, it's not necessary to have a 20% down payment in order to buy which is often the case when you acquire an investment home. When you purchase a primary residence there are many more loan options that do not require you to have as much cash on hand. Some options even include 100% financing.
Secondly, you can take more time to make improvements to the home. As soon as you close on an investment property the countdown begins and every day that passes, while you own the property, is money lost in carrying cost and time off the market, or on the market.
Third, after you sell the home you get the benefit of not being charged capital gains taxes. On investment properties, after the sell, you have a capital gains tax that must be paid to the government. However on personal property, the tax is waived for property sold up to $250k if you're single, and up to $500k if you're married, as of the time of this post. But the caveat to avoiding the capital gains tax on your primary residence is that you must hold the property for at least two years. So, if you want to avoid capital gains, you have to be okay with a minimum stay of 24 months before putting the home back on the market.
For the potential ROI (Return On Investment) it can be worth the wait.
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