What to do With Residential Properties | Fix & Flip Properties

1. Fix andFlip vs. Buyand Hold 2625 E ast 14 St. Suite 209 Brooklyn, NY, United States 1 1 2 35 info@expresscapitalfinancing.com www.expresscapitalfinancing.com

2. There’s more than one way to invest in real estate,and it often comes down to a choice between the ‘fix and flip’ or the ‘buy and hold’ strategies. Each strategy comes with its own pros and cons, so if you’re considering both investment options, here is a quick guide to help youdecide.

3. Fix andFlip Recalling our ‘Ultimate House Flipping Cheat Sheetfor Beginners’ article, this strategy involves purchasing a property, making improvements, marketing it, and then selling it for profit. Flipping houses or commercial spaces requires a lot of effort within the shortestamount of time possible. This allows for a faster ROI, freeing up investors’ capital for their next money-makingproject.

4. Finding the right propertyto renovate andsell The key to maximizing profits here is to findproperties lower than the market price, like foreclosed homes,and giving it a reasonably financed makeover. CNBC reports that inexperienced flippers tend to put too much money into renovations. As a result, these expenses quickly add up and investors might find that their net profit is not significant enough for the work put into the flip.

5. But when financed and managed properly,fix and flip properties can promise instant gains — minus the holding and transactional costs of the buy and hold strategy. When it comes to the choice of residentialand commercial property to flip, and Entrepreneur article suggests canvassing for fixer-upper properties inthe ‘nicest’ neighbourhoods. This means that the property should be adjacent to decent schools, have easy commute options and routes, and is part of a competitive market. The last point is especially true for flipping commercial mortgages properties. Nearbymalls and buildings mean a bigger guarantee of faster returns on office and retailspaces.

6. Buy andHold Collecting properties is equivalent to amassing wealth. The biggest disadvantage of the buy and hold methodis that it requires a sizable amount to invest with, especially when looking to purchase several properties. However, investors can be rewarded with steady returns by putting them up for lease, which can definitely add up overtime.

7. Whattodowithresidentialproperties Long-term rental – Apartment Units: Having long-term tenants ensures a more consistent income, which means that the property will continue paying for itselffor the foreseeable future. As a landlord, you won’t have to worry about marketing the space, paying for utilities, or doing basicmaintenance. Short-term rental – Vacation Homes: If you own a property in a touristy destination, real estate investor Sarnen Steinbarth explains that your property offers higher income potential as a short-term rental.Luxury homes, seasonal vacation rentals, and Airbnb unitscan be very lucrative, but this means that you’d have to consistently market to renters. Depending on your agreement with the tenant, you’ll most likely be shouldering utility and repair costs, aswell.

8. What to do withcommercial properties Long-term rental – Retail or Office Space: In a competitive market, you’ll be able to rent out your commercial property in no time. Do note that commercial leases have longer terms than residential units, and whether a contract renews automatically or not depends on your agreement with your tenant.There might also be significant renovations to be done on the property. This is so it suits the business’ branding, especially in retail spaces, or the company’s needs,as in the case withoffices.

9. Short-term rental – Coworking Space:Alternatively, you can also capitalize on the growing number of startups and young professionals in your area by creating a coworking space. According to aSmall Business Trends post on the rise of coworking,2,188 spaces opened in 2018 worldwide, with half ofthem located in the US. The number of remote workersand freelancers continue to rise, which by this year is expected to account for 40% of the totalworkforce. Many of them are turning to these spaces that offer different types of packages that fit their needs. Asthe investor, you can have a flexible setup, similarto Industrious and its canvas suites for teams of morethan 20, private offices for smaller groups, and community memberships for entrepreneurs and freelancersjust looking for a dedicated desk or flexible seating.This way, you can rent out multiple flexible spaces within your property to more people at atime.

10. Short-term rental – Pop-up or Events Place: For those who don’t want the hassle of managing thistype of business, what you can do is to provide a space for pop-up shops or a rental space for private events. All you’ll have to do is provide basic amenities, such as bathrooms and lighting, and give free rein to your tenants. Whether you’re dealing with a residential or a commercial property, knowing your market is key to maximizing your investment. That, and a keen sense of property management are very important. Your responsibilities include reporting your rental income to the IRS — an important step in getting tax deductions that come with owning rental real estate. And ofcourse, knowing how to deal with tenants is essential,too.

11. The fix and flip strategy is more suited for investors working with a smaller capital and looking forquicker returns. This requires realistic expectationsand experience with making renovations that won’t diminish profits. If you’re looking for a more long-term and steadier investment, you can opt for the buy and hold method, provided that they know how to managepeople and amenities. With both strategies, understanding the market iscrucial.

12. 2625 E ast 14 St. Suite 209 Brooklyn, NY, United States 1 1 2 35 info@expresscapitalfinancing.com www.expresscapitalfinancing.com