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This Is Not A Fix and Flip

Over the last year the housing market has seen historic gains. Bidding wars are pushing prices up with some buyers paying 6 figures over asking price. This might inspire many real estate investors to consider getting into fix and flip as a real estate investment strategy.

What if you could fix up multiple homes at the same time and collect rental income while waiting for them to sell? That is multifamily value-add investing. We are going to compare fix and flip and multifamily value add investing to show how it allows you to have your cake and eat it too.

Benefits of Fix and Flip

Fix and flip investing offers a quick investment with a quick return. Usually the property is purchased, renovated and resold within one year.

This short time period limits the amount of time your money is “locked in” the investment and therefore the amount of time it is at risk.

Fix and flip properties are also vacant so there is no need to manage tenants or deal with maintenance complaints especially the dreaded late-night call about an overflowing toilet.

There are also great financing options. You can purchase a property for as little as 10% of the purchase price and receive a loan to cover the remaining cost to purchase the property and the costs of renovations.

Using leverage at this rate on such a short-term investment increases your rate of return

The financial gain is not the only rewarding part. Seeing a run-down and over-looked property go through a drastic transformation is also rewarding.

Negatives of Fix and Flip