Kevin AmolschIf you fix and flip properties you are often considered a real estate investor. In fact if someone asks you what you do for a living you might even say you invest in real estate. I think flipping properties is a way to earn a great income but is it really investing? Let’s start by defining what investing is. According Mr. Webster an investor is “Someone who commits capital in order to gain financial returns.” It could be argued that an investor uses capital to gain financial returns without relying on their own personal effort. If you are flipping properties you are definitely actively participating and you might admit that you are actually working pretty darn hard for the return. Again I think flipping houses is a very lucrative business but to me it is a business and not an investment. Once you sell the house you will never earn another dime on that house.
This is a very important distinction because through my 11 years in the business I have seen people that have made a lot of money flipping houses lose everything. The lost it all because their life style adjusted to their income level. All the money they made was being spent to support their life style and none of it was actually being invested. I big part of preparing for the future or just a potential rainy day is to put money away. The most successful people I have ever met or had the pleasure to talk to have an income generator (or several) and they invest their income in real estate and other options that will both produce passive income and future growth. Real estate just happens to be one of the best options that can produce income and growth.
If you agree with what I am saying than you should have a two prong attach with your real estate career. Obviously you need income to live and to have money to invest so flipping houses can be a big part of that AND you should be buying rental property to generate additional income streams and growth for later.
