You can make many arguments in favor of house flipping – it’s easy to start with and provides a steady cash flow. On the other hand, while wholesales bring in less money, you’ll be closing deals and turning over profits more often and is arguably the better investment strategy for experienced realtors. Today, we’ll size up the two investment strategies and determine what works best for newcomers in real estate investing and experienced veterans.

House Flipping – The entry point for most real estate investors

When you start in real estate investing, house flips serve as the most lucrative real estate investment strategy. Here, with a decent investment, you can start with a property, improve on it, and then sell it back at a hefty profit. The numbers are simple, and if you can perform a good flip, you’ll fetch a good price. Therefore, house flipping is great for beginners coming into the real estate business.

With a good flip, you can make a sizeable profit quickly. If you have the know-how and patience to completely turn around a run-down house – you’ll be looking at a good return on investment. House flipping is a great way to start in the real estate business and many newcomers latch onto this as their primary investment strategy.

Is Wholesaling a Better Real Estate Investment Strategy than House Flipping?

If you’ve dabbled with wholesaling in the real estate business, you’ll know that after the initial rough start, wholesaling brings in a lot more money in the long run.

For starters, you get a much better return over wholesaling than you would through a house well-thought-out house flip. To give a ballpark figure, you’re looking at margins anywhere between $10,000 and $40,000.

Next, a personal time investment. To close out a flip, you need to put in months to get the flip ready and make your property marketable to turn a profit. On the other hand, in the case of a wholesale transaction, you can close out multiple new deals in the time it would take you to close a single flip. Therefore, although you’ll be making less money overall, because of the frequency at which you can complete and jump onto new deals, you will be raking in cash faster and so make more money. Overall, if you play your cards right, you’ll be spending less time making more money than you would have with a house flipping strategy.

Conclusion

Wholesaling is great – but there are pitfalls. And so, it’s recommended for more seasoned investors rather than beginners coming into real estate. If you want to make money fast and grow your portfolio, wholesaling is a great investing strategy. Conversely, if you want safer deals and take your time to grow and understand the market before switching strategies, house flipping is the right choice. Therefore, before settling on a particular investing strategy make sure you size up your skills and determine which is the best real estate investment strategy for you. After all, it’s not the strategy that is instrumental in your success, but the actions you take to best utilize that strategy.