Flipping Houses vs. Rentals: Which Will Make You Richer TODAY?

Рет қаралды 42,766

Күн бұрын

Flipping houses vs. renting: which makes MORE money in 2023? One gives you quick cash; the other gives you long-term cash flow. One leads to higher margins and more active income; the other requires time but can help you retire early and reach financial freedom. And with high mortgage rates and profitable properties hard to find, can you still make money in today’s market? Let’s find out.
Tarl Yarber is a recovering house flipper with more than 600 flips under his belt. Not long ago, he realized flipping wasn’t helping him become financially free, so he started holding some of the homes he had flipped. But now, cash flow is becoming rare in rental properties, so what did Tarl do? Go back to flipping full-time? Give up on rentals? Do a bit of both?
Tarl does the math to show which strategy, flipping houses or buying rentals, makes more sense in 2023 and which will make you richer faster. Plus, we’ll show you the strategy Tarl uses to make money doing BOTH in an impossible housing market.
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00:00 Flipping Houses vs Renting
01:14 Making $$$ in 2023
02:10 Example: Flip vs. Keep 10 Houses
04:54 Which Wins LONG-TERM?
07:37 Flip, Buy, Repeat
08:21 The Risk of Flips
12:45 Start Thinking STRATEGICALLY
13:20 What Tarl Would Do in 2023
16:01 Why You SHOULD Still Flip

Пікірлер: 57

@biggerpockets 8 ай бұрын

Would you try flipping or renting in today's market? Let us know!

@joescaparra1404 8 ай бұрын

My Financial Planner in ME tells ME that before you decide the strategy, you define the goal! So if you ask me; I am buy and holding all day long. The environment does NOT dictate my Goal especially if it is a 30-50 year result I am after! My goal is to provide predictable and sustainable income to sustain a high standard of living till the day that my wife and I die and then to pass on a substantial legacy for my children (stepped up in basis come into play). I call this financial freedom the moment it produces enough income to accomplish your income needs. The tortoise if I remember correctly wins the race! Flipping is the rabbit, buy and hold (you say renting) is the tortoise. Not sexy but gets the job done EVERY TIME! Once you get past about 5 years into this strategy it should be sustainable in any market condition. Not true if you're a flipper. Being a flipper is a job, being a buy and hold your utilizing OPM (Others People's Money) strategy to eventually be passive income or at least semi-passive. You also need to take into consideration RISK! Flipping is much higher risk! Property price fluctuates much greater than rents. Most renovation estimates end up costing more. We have all heard or experience people losing money on property through foreclosure, job layoffs, market fluctuations or combination of these events. When have you EVER heard that rents have dropped in half..........I was renting an apartment for $1000 a month and I went to renew and they said it is my lucky day and for the next year your rent is $500 monthly...........Never in my 68 years of living! Rents don't crash (unless your living in Detroit). Renting out a duplex for $1000-1500 a month won't have these issues! Two kids working at Mac Donalds earning $12 an hour can afford my rents! How many Mac Donalds went out of business during any downturn or any time in the last 50 years! Not enough to have any negative impact. Stay with relatively low income housing (duplexes) and buy and hold over long periods of time will serve most investors well! Walmart has got it right.........make a little bit of money off a lot of folks! Duplex investing: Make a little off a lot early on, and then; wake up one day and you will be making a lot off a lot! Don't worry about only making a little on each unit early on. The miracle of compounding time is the similar to compounding interest! If your goal is to live for today, flipping might work for you, but if you want to get Wealthy over TIME then Buy an hold works well! Cheers!

@Trenttabor 8 ай бұрын

Im 27, 5 houses currently, 4 of them rentals. Its a bout a 1MM in value - 70 percent equity and 30 percent debt. Im pretty happy with the cash flow but want to get more into flipping to get the big chunks of cash coming in as apposed to a few thousand a month. Owning rentals feels like slow money and it is, until you sell and get to see what you have accomplished. I think its good to have a base of rental income coming in since it is important to diversify your income and not rely on employers for 100 percent. But, after your base rental income is established, flipping as a more active income seems attractive.

@Palantir_Daily 7 ай бұрын

Congratulations. That’s a big feat.

@user-zp7zu6dz4o 6 ай бұрын

Congratulations!

@castlerc 6 ай бұрын

Flipping when you’re young yes. Just build your long term portfolio. I’m 54 and retired with 7. Worked for me. GL

@gianthills 3 ай бұрын

How did you find your first?

@improveyourself-selfimprovemen Ай бұрын

Congrats man. What me and my team are doing right now is flipping houses to make the brrrr strategy more effective and to scale our rental portfolio on a way bigger scale as we can refinance our rentals way easier that way.

@Whatever0704 8 ай бұрын

Do both. Use rental depreciation to offset the flip income. Depreciation means nothing if you do not have anywhere to use it. Also really depends on your goals and age. VERY different if you are 25 or 60.. have a family or not. There is never a "right answer"

@Universalview22 Ай бұрын

That’s what I was thinking, start flipping and buy some rental properties with part of the profit.

@Rogelio483 4 күн бұрын

Yes smart @@Universalview22

@SergioB-MakingMillionaires 7 ай бұрын

I do the owner finance strategy. I think it’s a combination of both renting (passive income) and flipping (active income). Plus by selling owner finance I avoid all the headaches of changing toilets, chasing tenants for rent, and do not pay property taxes. I buy a property, sell it via owner finance with a down payment and then make an amortized note for the buyer. I do miss out on the appreciation, but at least I can rely on the more steady income coming in from my buyers. I am basically a mortgage bank with a house as a guarantee.

@gokoronkwo 8 ай бұрын

We do both. We’ve been holding properties in Harris County since 2014, executing build to rent since 2017, and selling new construction duplexes since 2017

@wbawba4275 8 ай бұрын

Great video. Keep up the work. Just found your channel will watch more of your videos.

@leeroach3381 8 ай бұрын

Very helpful Thank you for sharing

@DanKohan 8 ай бұрын

Great video! The decision between flipping and holding properties can be a tough one. It's true that there's no one-size-fits-all answer, and it often depends on your financial situation, goals, and the current market conditions.

@ausquiano29 7 ай бұрын

Great stuff here. Thanks so much I will start now

@zorina109 8 ай бұрын

Love your videos‼️😍

@DerekDeVille 7 ай бұрын

Great video!

@wbawba4275 8 ай бұрын

Family frieds. Investers. Hard money lenders. You would have to have a big track record for hard money lender to finance 10 properties.

@TrendSettaRico 4 ай бұрын

Simple answer.....both!

@hassanbazzi3545 8 ай бұрын

Well explained

@Jim_Lawrence 8 ай бұрын

The point at the end where you point out how much you have learned through the flipping experiences shouldn't be washed over. Every skill you can add makes you more valuable. Just think about how many go to college for money you could buy a house outright for, and gain text knowledge that they need to get a real job to learn how to apply. Not to mention college is an up front investment that you need to pay back over how many years? I personally agree that adding a flip(s) may be necessary to fund our next property, with rentals being the main goal.

@JoseRodriguez-gr4tg 8 ай бұрын

I think the best way is to do both but not in a way that was discussed. When you flip you could 1031 exhange each one even multiple properties at once to get into bigger investments. This way you are increasing cashflow, rolling over taxes, and ultimately scaling much faster.

@justenrider5051 8 ай бұрын

You have to hold for 2 years or have clear evidence you intended to hold a property to do a 1031 before 2 years. So, no.

@KennethLeeAtLGA 8 ай бұрын

If the rates are high then even home buyers cant afford to buy the flip

@morganruest1803 6 ай бұрын

Let's get to flipping

@dhowto3005 7 ай бұрын

Thanks.

@abdulla_mirpur_rei 8 ай бұрын

Smart!

@northcarolinaname 8 ай бұрын

It would be helpful to compare with alternative investments. Because it sounds like for most deals, the return is marginally better than passive index funds

@butchgreene 8 ай бұрын

Considering he is doing rehab loans that are interest only payments and walking away 90-180 days later with a $30k net profit...hardly.

@northcarolinaname 8 ай бұрын

@butchgreene ah i meant comparing buy and hold strategies. Because im coming to the conclusion that for most people, real estate only makes sense if its a fix and flip or you have an immediate value add opportunity. But many people think that buying a home is always better when there are many deals that end up being worse for you than the sp500 which is so much more passive

@joescaparra1404 8 ай бұрын

This is a tougher decision today than it ever was. Both flipping and finding good cash flow properties in this 8% and up rate environment is tough. However, if you have a long term vision and you have the resources than allow you not to have to live off your cash flowing properties for 10-15 years then buy and hold is a no-brainer decision. Going back 10 years ago in Austin TX I had the opportunity to buy a beat up duplex for 70k in a bad neighborhood. I could sell it the next day for 120k without putting a dime into the property or I could put 10k in rehab and cash flow positive 700 a month. The sexy decision would be to take a 50k one day profit and brag to my friends. However, the long term focus I took was to take the monthly cash flow and hold it. It now provides $2000 monthly positive cash flow and is valued at %550k. How many of you flippers look back and say to yourself, I wish I had kept that one!!!

@elvispresley3234 8 ай бұрын

Depends on the deal. We are in a market (overall) where most will not cashflow or have appreciation. There is no black-or-white answer.

@lifeandthoughts8317 5 ай бұрын

What about fix using hard money n convert the mortgage to conventional

@Lovingmylife24 8 ай бұрын

Rentals seem like the better deal in the long run.

@butchgreene 8 ай бұрын

We're trying to buy a home in a college town for our daughter ao that ahe can finish her undergrad & masters in one place. If we knew how to flip, could use that money as the 20% down needed. But no clue on flipping

@awwskit9753 7 ай бұрын

It’s hard to flip homes with the current interest rates

@lorettathai9713 8 ай бұрын

I need motivation

@sueandlarry3702 2 ай бұрын

1031 exchange

@AberrantArt 8 ай бұрын

Where would people get the money to buy 10 houses?

@morgenglende-michalski369 8 ай бұрын

Lol save up or make good income! Or buy in a cheap market, I’m only 23 and I could get 2 or 3 houses in a cheap market

@Way2fast4ya 8 ай бұрын

exactly lol.... more realistic for a normal Timmy earning $100k salary W2 job a year.... maybe can buy 1-2 homes per year at $250k purchase price = approx $50k downpayment cash each property...

@AberrantArt 8 ай бұрын

@@morgenglende-michalski369 that's awesome. What do you do for work? Sounds like I need to switch careers

@morgenglende-michalski369 8 ай бұрын

@@AberrantArt I work as an assistant community manager(not even the head honcho, I’m in 2nd place) for a large student housing complex. I highly recommend it if you have a high tolerance for BS and ignorant kids, I started as a leasing consultant and moved into this position after 8 months(generally u need 1-2 years before manager level cuz there is a LOT of liability). I get paid pretty well for the position, but it’s a great career with tons of jobs and an easy path up. General managers(head honcho) make between 60k-200k depending on the size of the property(s) they manage and how much income they produce(my boss makes around 80k salary, $110k total compensation package, for a 926 bed property, has no degree)

@AberrantArt 8 ай бұрын

@@morgenglende-michalski369 that's pretty good. Congrats on the career so far. What markets would you be able to purchase 2 or 3 homes in? The interest rates right now are rough