{"id":5099,"date":"2023-06-16T19:14:00","date_gmt":"2023-06-16T23:14:00","guid":{"rendered":"https:\/\/propertyonion.com\/education\/?p=5099"},"modified":"2023-06-12T08:10:46","modified_gmt":"2023-06-12T12:10:46","slug":"is-a-live-in-flip-the-right-strategy-for-you-as-an-investor","status":"publish","type":"post","link":"https:\/\/propertyonion.com\/education\/is-a-live-in-flip-the-right-strategy-for-you-as-an-investor\/","title":{"rendered":"Is a Live-In Flip the Right Strategy for You as an Investor"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">In this Article:<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/propertyonion.com\/education\/is-a-live-in-flip-the-right-strategy-for-you-as-an-investor\/#So_You_Want_to_Be_a_Real_Estate_Investor\" >So, You Want to Be a Real Estate Investor?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/propertyonion.com\/education\/is-a-live-in-flip-the-right-strategy-for-you-as-an-investor\/#The_Benefits\" >The Benefits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/propertyonion.com\/education\/is-a-live-in-flip-the-right-strategy-for-you-as-an-investor\/#Downsides\" >Downsides<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/propertyonion.com\/education\/is-a-live-in-flip-the-right-strategy-for-you-as-an-investor\/#An_Example\" >An Example<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/propertyonion.com\/education\/is-a-live-in-flip-the-right-strategy-for-you-as-an-investor\/#Last_Words_of_Advice\" >Last Words of Advice<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"So_You_Want_to_Be_a_Real_Estate_Investor\"><\/span>So, You Want to Be a Real Estate Investor?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are plenty of <a href=\"https:\/\/propertyonion.com\/education\/7-real-estate-investing-tips-for-beginner-investors\/\" target=\"_blank\" rel=\"noopener\">ways to invest<\/a> in real estate, depending on your current lifestyle, some may be more appealing than others.&nbsp;<\/p>\n\n\n\n<p>For more hands-off approaches,&nbsp;<a href=\"https:\/\/propertyonion.com\/education\/7-real-estate-investing-strategies-for-passive-income\/\" target=\"_blank\" rel=\"noopener\"><strong>check here<\/strong><\/a>. To learn more about beginning real estate investing,&nbsp;<a href=\"https:\/\/propertyonion.com\/education\/7-real-estate-investing-tips-for-beginner-investors\/\" target=\"_blank\" rel=\"noopener\"><strong>check here<\/strong><\/a>. Today, I\u2019m here to talk to you about a bolder type of investment, the live-in flip.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What Is a Live-In Flip?<\/h3>\n\n\n\n<p>It\u2019s pretty much what it sounds like, flipping a property that you live in throughout the process. Investors who go this route have a lot of reasons, but many avoid it. Let\u2019s take a closer look.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>A lot of flippers have taught themselves how to do different types of renovations.<\/p><\/blockquote>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Benefits\"><\/span>The Benefits<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">1.&nbsp;&nbsp;&nbsp;Taxes<\/h3>\n\n\n\n<p>Possibly the number one reason people choose this strategy is to avoid hefty taxes. If you are investing in a property outright, you are subject to income taxes. However, if you live in it as your primary residence for two out of the previous five years, you can avoid income and capital gains taxes (up to $250,000 or $500,000 for a married couple).<\/p>\n\n\n\n<p>To read up about it,&nbsp;<a href=\"https:\/\/www.congress.gov\/bill\/105th-congress\/house-bill\/2014\" target=\"_blank\" rel=\"noopener\">click here<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2.&nbsp;&nbsp;&nbsp;Less Pressure<\/h3>\n\n\n\n<p>You aren\u2019t rushing against the clock, so you can begin recouping all the months you paid a mortgage with no revenue. Essentially, your housing expenses are an investment you can later regain. Free housing anyone?<\/p>\n\n\n\n<p>While you may have other reasons to wrap up your flip, you\u2019ll be parked there for two years anyway. So, whether you repaint the foyer today or next Monday isn\u2019t going to make a big difference.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3.&nbsp;&nbsp;&nbsp;No Commute<\/h3>\n\n\n\n<p>A lot of investors like to check on the progress of their flips. Well\u2026for you that could mean just walking to the kitchen! Whether you\u2019re doing the improvements yourself or not, you will have a front-row seat.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4.&nbsp;&nbsp;&nbsp;An Optional DIY Education<\/h3>\n\n\n\n<p>For those who know about electrical or plumbing, this is a great way to use their skills and save a pretty penny. When it comes to the rest of us, YouTube can become our best friend. A lot of flippers have taught themselves how to do different types of renovations. They end up with their profits and new skills.&nbsp;<\/p>\n\n\n\n<p>While this may be a part of some flipping journeys, many successful flippers hire contractors to do the work. Acting as a project manager throughout the process, they keep a close eye on the progress without ever putting on a tool belt.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5.&nbsp;&nbsp;&nbsp;More Financing Choices<\/h3>\n\n\n\n<p>If you\u2019re going to use this as your primary residence, you will have financing options unavailable to other investors. This can mean less money down or lower interest rates. However, most traditional loans will require a home to be habitable, which can limit the properties you have to choose from.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Downsides\"><\/span>Downsides<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Make sure you understand the lifestyle changes this will entail for you.<\/p><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\">1.&nbsp;&nbsp;&nbsp;Having a Messy Life<\/h3>\n\n\n\n<p>The mess associated with living in an active construction site is not for everyone. Personally, if there is clutter, debris, or open drywall in my home, I get pretty antsy.<\/p>\n\n\n\n<p>Make sure you understand the lifestyle changes this will entail for you.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2.&nbsp;&nbsp;&nbsp;No Boundaries<\/h3>\n\n\n\n<p>Speaking of lifestyle changes, your work\/life balance is about to get a little blurry. If you are working where you live, it can be difficult to draw that line.<\/p>\n\n\n\n<p>A good strategy is to limit the construction to one room or area of the home and keep the rest livable or at least a space where you can go to relax.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Don\u2019t go making your dream home when you are planning to sell in six months or a couple of years.<\/p><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\">3.&nbsp;&nbsp;&nbsp;Attachment<\/h3>\n\n\n\n<p>Sometimes, it can be hard to let go of our creations. Whether you\u2019ve done the work or hired it out, you poured effort into creating this space.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Make sure to <a href=\"https:\/\/propertyonion.com\/education\/10-house-flip-costs-you-can-cut-corners-on-but-these-10-you-shouldnt\/\" target=\"_blank\" rel=\"noopener\">keep the updates and renovations you do simple<\/a>. Don\u2019t go making your dream home when you are planning to sell in six months or a couple of years. That can make it&nbsp;<strong>a lot<\/strong> harder to walk away.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4.&nbsp;&nbsp;&nbsp;Limited Scalability<\/h3>\n\n\n\n<p>If you\u2019re maximizing the tax benefits and only moving every two years, this can be tough to scale.&nbsp;<\/p>\n\n\n\n<p>Yes, you can level up the type of property you buy each time, but you\u2019re still only flipping one property at a time this way.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5.&nbsp;&nbsp;&nbsp;Always Moving<\/h3>\n\n\n\n<p>That said, you will most likely be moving every two years to maintain this investment strategy and continue flipping. If you don\u2019t like moving, that may be a problem.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Do yourself a favor and get a thorough <a class=\"wpil_keyword_link\" href=\"https:\/\/propertyonion.com\/education\/home-inspection-investment-property\/\" target=\"_blank\" rel=\"noopener\" title=\"Do I Need a Home Inspection for an Investment Property?\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"135441\">home inspection<\/a> to avoid any surprises.<\/p><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\">6.&nbsp;&nbsp;&nbsp;Hidden Problems<\/h3>\n\n\n\n<p>This is a risk with any property. How many horror stories have you heard about foundations or roofs or some weirdness hiding under a fresh coat of paint?&nbsp;<\/p>\n\n\n\n<p>Homes that are clear <a href=\"https:\/\/propertyonion.com\/education\/rehabbing-a-fix-flip-a-beginners-overview\/\" target=\"_blank\" rel=\"noopener\">fixer-uppers<\/a> have a higher risk of more issues lurking beneath the surface. Do yourself a favor and get a thorough home inspection to avoid any surprises.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"An_Example\"><\/span>An Example<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s talk about my unintentional flip. I moved into a home several years ago intending to in it forever\u2026then things changed. I decided to make the most of my investment when selling.<\/p>\n\n\n\n<p>My husband and I are by no means expert craftspeople. So, our work on the property was mostly cleaning, painting, and caulking. We also did extensive landscaping and hauled hundreds of pounds of junk.&nbsp;<\/p>\n\n\n\n<p>We hired professionals to do some work, replacing drywall, changing a few light fixtures, and replacing the flooring in half the house.&nbsp;<\/p>\n\n\n\n<p>We ended up with a tidy profit that helped us continue living mortgage free in our next home.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Last_Words_of_Advice\"><\/span>Last Words of Advice<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>It\u2019s hard to get that when you are constantly surrounded by works in progress. Schedule nights off or weekend getaways whenever possible.<\/p><\/blockquote>\n\n\n\n<p>If you think this all sounds like a dream, here are some things to consider before beginning your live-in flip.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Get a tool belt<\/strong> \u2014 If you plan on a DIY flip, you need to be able to find the tools you need when you need them.<\/li><li><strong>Prepare for dust<\/strong>&nbsp;\u2014 Between demolition and drywall installation, life is about to get messy. Keep your stuff out in the garage or someplace else.<\/li><li><strong>Tidy up<\/strong>&nbsp;\u2014 You don\u2019t want drywall dust or sawdust all over your home. Get some doormats and take off your work boots before entering your stress-free zone.<\/li><li><strong>Vacation<\/strong>&nbsp;\u2014 We all need breaks sometimes. It\u2019s hard to get that when you are constantly surrounded by works in progress. Schedule nights off or weekend getaways whenever possible.<\/li><li><strong>Time<\/strong>&nbsp;\u2014 Do you have the time to devote to this&nbsp;potentially full-time job&nbsp;&nbsp;with your current lifestyle? Could you subcontract the work, and what would that look like?<\/li><li><strong>Skills<\/strong>&nbsp;\u2014 Do you have the necessary skills to do this, or&nbsp;are you willing to learn them&nbsp;? If not, are you able to afford a contractor to do these tasks?<\/li><li><strong>Roommates<\/strong>&nbsp;\u2014 Whether they are your family or friends, whoever lives with you&nbsp;<strong>must<\/strong>&nbsp;be on board.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Add up The Numbers<\/h3>\n\n\n\n<p>One final note on the numbers: let\u2019s say you decide you\u2019re ready for this next step, you\u2019ve got your toolbelt, and you\u2019re ready to get to work. Even if you only make $90,000 after sinking $80,000 into this investment, that is $10,000 of profit and two years of free housing, which you can now roll into your next investment.&nbsp;<\/p>\n\n\n\n<p>It can be a short-term strategy for you until you have enough to buy the home you want. Or this could be your life. Whatever you choose, you\u2019ll be house-hacking yourself to financial freedom. Keep that in mind while&nbsp;<a href=\"https:\/\/propertyonion.com\/education\/how-to-plan-your-real-estate-investment-strategy-for-2023\/\" target=\"_blank\" rel=\"noopener\">planning your investment strategy for 2023<\/a>. Also, check out&nbsp;<a href=\"https:\/\/propertyonion.com\/education\/how-to-price-your-flip-into-2023-softening-market\/\" target=\"_blank\" rel=\"noopener\">how to price your flip<\/a>&nbsp;once the hard work is done, and it\u2019s time to move on to your next project.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>So, You Want to Be a Real Estate Investor? There are plenty of ways to invest in real estate, depending on your current lifestyle, some may be more appealing than others.&nbsp; For more hands-off approaches,&nbsp;check&hellip;<\/p>\n","protected":false},"author":34,"featured_media":5292,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[590,162,461,581,377,592,591,496,54],"class_list":["post-5099","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-articles","tag-diy","tag-fix-and-flip","tag-flipping-houses","tag-investment-property","tag-investor","tag-live-in-flip","tag-new-skills","tag-real-estate-market","tag-taxes"],"_links":{"self":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/5099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/comments?post=5099"}],"version-history":[{"count":151,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/5099\/revisions"}],"predecessor-version":[{"id":15143,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/5099\/revisions\/15143"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media\/5292"}],"wp:attachment":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media?parent=5099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/categories?post=5099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/tags?post=5099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}