Why I shifted from House Flipping to Large Multifamily
In an exciting Real Estate industry that provides so many options that can sometimes feel overwhelming, I was facing the dilemma of making an important decision. My Real Estate career came to a point where I felt I was ready to scale and become a full time investor, so I decided to quit my W2 job and find a niche to replace my income. I already had a small multifamily short term rental business, and was also house hacking but my Real Estate Income was nowhere near my W2 income which led me to decide to become a full time house flipper.
House flipping which consists on buying a property that needs some work (usually a lot!), renovate it with a contractor or handyman (depending on the type of job and if permits are needed), and then sell it at a profit. House Flipping projects typically last 2 to 6 months (sometimes more) and if done correctly and efficiently can be a very profitable business.
After a few months and a couple projects, I realized that even though flipping is a great gig, finding a single family home in this market (off market using wholesalers, auction/foreclosure, and sometimes MLS) required a lot of time and effort and my capital was sometimes sitting in the bank 3-4 months before I was able to start a new project!
This led me to rethink my overall strategy and adjust my vision to continue to pursue a career in Real Estate which became my passion several years ago. I started attending Real Estate conferences and networking with different people in the business which allowed me to find new alternatives for me to pursue.
After all my research I found that the best use of my time and capital was to invest in both passive and active projects in large multifamily syndications. With the economies of scale in these larger projects I was able to get large returns on my passive funds, and the time invested in finding and buying a property, finding investors, and managing the assets was much more rewarding than potential house flipping projects.
I am always learning and evolving but for now I found the perfect niche for my risk personality, return on effort and work-life balance expectations. As no business model or investment strategy is a one size fits all, I encourage you to look within yourself and find the answers to all your questions as you look further into your long term vision and goals.