Flip Or Hold?
For those who've made a living in REI, what's your opinion on flipping vs. holding?
I know there are two schools of thoughts on these strategies, and each has its own obvious advantages and disadvantages: flipping a property yields instant ROI, while holding can mean greater appreciation, as well as equity and income.
I ask because I have an opportunity to make 60% ROI on a multi a bought two years ago. My long term goal for this property was to hold it forever (because it’s a money maker), or at least until it becomes a pain in the ass.
My investment strategy going forward is going to be diversification: flip some, hold a portfolio of others. Like I said, this one was earmarked for a “hold.” But I'm wondering if I shouldn't just take the money and run.
Anyway, I was curious to hear from the people who've been doing this for years. I'm not looking for feedback on this specific property, just feedback in general on how you've made the most money in REI.
Thanks.
[addsig]
One thing to consider is how quickly did the market value go up. You said you can make a 60% ROI...is that due to a fairly steady increase over the two years, or did it hold for 18 months then shoot up in the last six?
Along the emerald coast here in Florida, property values suddenly jumped quite a bit a couple of years ago. A lot of original buyers soldout and were pretty proud of themselves for making $100K or more on properties they'd bought in the late 80s...until prices doubled again two years later and now those original buyers can't touch anything in the area.
BTW--where did your quote on cemeteries come from?[ Edited by Sloan on Date 02/25/2004 ]