Fix & Flip: Hold or Sell?

The Fix & Flip real estate market is booming. Thanks to an increasing number of home buyers in the market looking to purchase homes and rising home prices there are endless possibilities for all who want to get a piece of the pie.

What happens after you purchase a property can look different for everyone. For some, quickly making needed renovations and getting it back on the market is important. For others, the strategy can involve holding on to the purchase for a while and waiting until an optimal time to relist it on the market.

All of these methods have their place. Here’s a closer look at a few of them.

Flipping Quickly Means Faster ROI

The quickest way to get turnaround on your investment is to flip it as fast as possible. Be strategic and have your key partnerships with contractors and builders set up in advance so any improvements can be handled promptly. This enables you to move the transaction forward and recoup the money you invested for more Fix & Flip possibilities. There are some tax and cost disadvantages when compared to holding a property but whether or not they outweigh the hassles of trying to find tenants or maintain a property for an extended period of time is something you’ll want to consider.

Holding Can Give Your More Revenue Possibilities

On the flipside of quickly selling a property, there is holding real estate properties and letting them accumulate wealth over time as the stock market does its thing and an optimal time to sell comes around. There are also those investors who will buy a fix & flip and then hold in order to become landlords. There are tax advantages to consider with this strategy and the benefit of passive income but they are balanced by the need to take on legal responsibilities and ongoing management of those properties too.

At Sachem Lending, we provide originating, servicing, and managing services for first mortgage loans. We offer short-term (typically 12 months), secured, non-banking loans (sometimes referred to as “hard money” loans) to real estate investors to fund their acquisition, renovation, rehabilitation, development, or improvement of residential or commercial properties. We have an experienced management team, long-standing relationships, knowledge of the market, disciplined lending, a vertically integrated loan origination platform, structuring flexibility, and no legacy issues.