Short vs Long Term

Short term real estate investing can be highly rewarding. It can also be the reason you simply can’t retire. Don’t make the combination of time and success the enemy of your retirement plan.

 

Now what comes in to play here, is short versus long term investing. Now the classic short term is flipping, right? You buy a property, you get a good price on it because it needs a lot of work, you have the expertise or know people that do, and you make a lot of money when you fix it up and sell it for a higher price. That’s cool. I know a guy right now in the northwest, this is exactly his story. He took fifteen years to become, just in elite flipper, he got up to where he quit his job, he started flipping when he was around 38, 40 years old, he made more and more money so he quit, his wife quit her job, they sold their house, they bought a really nice bigger one, they started sending their kids to private school, they both got new cars, all the stuff. As he got closer to 50, and he was doing a lot of the work himself he was the hands-on foreman old school guy right, he started to realize that, though he was making a few hundred thousand dollars a year, he couldn’t quit because of all the financial obligations he had and he had nothing going for him outside of his huge earning capacity. Time is everything when you’re investing. There’s a lot of people that want to buy a lot of real estate but they can’t make it free and clear in time for retirement. So, they have riches that are, ironically, holding them back from what they really want to do. Again, keep your eye on the ball, retirement Income. Now what happens is, over time, they buy all these properties, they free and clear them with all the profits and there’s their exit. Now they’re out of flipping if they want to. They can keep the business going. Like any other business the head guy leaves if he’s trained somebody he can keep it going, that’s cool you’re still making money, but they’re not trapped now as flippers. So in the end, that because they used other long term strategies, and not just real estate they might have gotten some discounted notes, they might have started them, because they’re flippers, they might have started a ROTH retirement plan of some sort to get notes, if they were young enough they might have got an EIUL, which I will talk a little about later on, insurance policy that gives you tax free income from starting at retirement, tax free by IRS definition. But the key is, you get started.

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