Sunday, February 8, 2015

Flip or Hold

It appears that the debate on whether to flip or hold has already begun in regions throughout the US.

Of course, it makes sense to flip in areas where higher profit margins can be expected in short  turn abounds.  New York City for one continues to see a higher flip rates than other parts of the country.  Many areas of California are also flipping faster and not holding properties for rent.

I think that one factor which is being overlooked is the economics of the regions of the country that we are discussing.  In my opinion, it does not just depend on that flip margin.  Many investors will flip a property for a few thousand dollars in gains.  The cost of money and the capital available to those who choose to hold or flip is equally important.

Buy and hold vs. buy and flip has been going on for decades.  The cost of funds and access to those funds are as important if not more important than the margins made.  Of course, we all want maximum profit margins.  Not all of us in the business have the luxury of making these decisions based on margins alone

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