Vegas was good, but is too saturated with buy-and-hold investors and the hedge funds that have driven up pricing, leaving no margin for profit. Great rental market, but again, unless you have loads of cash to park indefinitely, not a viable option. But if I had $5m, I would be allocating 50% of that in multi-family housing as opposed to SFRs for long-term cash-flow. I would still do flips to better my cash-on-cash return. I see pricing softening from increased active listings now and will continue into next year. That means, pricing on acquisitions needs to be adjusted. Also – banks are starting to pick up on the shadow inventory and starting to foreclose more. If you’re going to sell, better do it now.

1) Flipping is not dead; it has always been and still is viable if you do your homework and make your money when you buy the property. I do agree, however, that it doesn’t work as well in certain markets.

2) Investing for solely for capital gains (appreciation) is a risky bet and pure speculation and how many investors like myself got into trouble when the bubble bursted – and it will burst again. If you are going to do buy-and-hold, you buy for the cash flow, never appreciation. If you do get appreciation, consider it only a bonus. Never invest for capital gains.

3) Buy-and-hold investing is great and the way to go if you have millions of liquid cash like the hedge funds, otherwise it makes zero sense to borrow and then buy-and-hold for passive income with annual return less than 18%. Seller-financing is in theory a solution to limited funds, however, not practical to depend on.

Bottom line: given the above facts, why would one would with limited funds want to tie up their precious cash in buy-and-hold deals for a paltry 8-10% return a year when one can STILL make at least that in 2-3 months fixing and flipping homes?

The reality is that both business models can and do work depending on the markets and the cash positions of the investors. The fact is that 99% of the investor population are not billion-dollar hedge funds with bottomless wells of cash, therefore, buying to hold is not a viable scenario to build wealth unless one has a minimum of $3-4m to get started.

1) Flipping is not dead; it has always been and still is viable if you do your homework and make your money when you buy the property.

2) Depending on appreciation is pure speculation; there is never a guarantee of it. Investing for solely for capital gains is how the economy tanked before. Why be an idiot and fall for this same model again?

3) Buy-and-hold investing is great – if you have millions of liquid cash like the hedge funds, otherwise it makes zero sense to borrow and then buy-and-hold for passive income with annual return less than 18%.

Bottom line: given the above facts, why anyone would want to ONLY tie their precious cash in a buy-and-hold deal for a paltry 8-10% return a year when one can STILL make at least that in 2-3 months fixing and flipping homes. Obviously, someone here wasn’t successful with the latter.

The reality is that both business models can and do work depending on the markets and the cash positions of the investors. The author forgets the very basic fact that 99% of the investor population are not billion-dollar hedge funds with bottomless wells of cash, therefore, buying to hold is not a viable scenario to build wealth unless one has a minimum of $3-4m to get started.

I liked your article and I do agree with you. The landscape for the small investor has changed. Not only because of large institutions “bulk buying,” but also because the investor market is drying up. We’re seeing so few investor grade properties for sale in the Columbus market that competition is very hot. Being in the REO listing world I know that overall foreclosures are slowing down dramatically. Single investors as well as institutions are struggling to find new property.

I do believe home ownership is still a very high priority for most Americans, whether they can afford it or not. Luckily, low home prices and cheaper financing rates are still making purchases attractive. Most people I meet don’t tend to be put off by home ownership, their dislike is for banks and mortgages in general. We still want the white fence and the big back yard.