Is this a reasonable plan to make some money?

Question

My husband and I are thinking of moving into a different house every six months or so. Completely redoing it in our free time while we live there, then selling it for a profit of hopefully around $30,000 or more. We hope to do this only for 5 years. In the end we hope to have enough money to buy a house for us to live in permanently with cash. And to have another $100,000-$150,000 to invest in other real estate. We have 3 young kids right now. We have done one house remodel before that we only made like $10,000 off of. And one we are in the middle of right now that we hope to make $25,000 to $35,000 off of. Will moving so much be too hard on our family, even if the kids are able to stay at the same school throughout the moves? Is this a reasonable goal and financial plan for us to have?

Answer 1

Its a legit way to make money if you can handle the turmoil. Be aware it would be considered a business venture and you should keep relevant records.

Answer 2

You hit on a way to make pretty big money fast. On the other hand, you could be stuck with a money pit that you can't unload. If it were that easy to make a guaranteed $30k every 6 months, there would be a hellava lot more people doing it.

What you are doing is gambling. You are gambling that the housing market will continue to be hot and that you can continue to make money at this. Maybe it will happen. Maybe it won't. You could make huge money, you could lose big. It's a gamble.

Personally I think it would be a good bet if you two were young and no kids and could absorb a serious loss. But you have 3 kids. Not even accounting for the real turmoil of pulling your kids from one house to another, what the heck are you going to do if you spend all your savings on a house or two, fix it up, and it won't sell? What are you going to do if your plans simply don't work out the way you want?

If you're risk takes, are willing to risk your family's well being, then it's as good a gamble as any. With dependents, if you want something safer, diversify - several mutual funds, large cap, small cap, international, and real estate - a few bonds to secure your kids education and some stocks to gamble with. And when you have your 20%, an nice house.

But you won't get rich quick that way, that's for sure.

Answer 3

Here is your new plan....

1 - Buy fixer upper "A" and live in it at least 24 months, while doing repairs.

2 - Buy fixer upper "B" at about month 22 or 23, so it will be habitable by the time month 24 comes. Move in to "B" and rent out "A".

3 - At aroung month 41 or 42, put "A" for sale. You pay no capital gains tax up to $500 k in profit.

4 - Around month 48, you buy "C". Make it habitable, move in - you've already lived over 24 months in "B", so put "B" for rent.

5 - Around month 65 you sell "B". Again, you've lived in "B" for more than 2 yrs of the last 5, so no capital gains tax.

6 - Month 72, buy "D". Make it habitable, move in after you've been in "C" for at least 24 months. (the 2 yrs to avoid capital gains tax)

Continue this patern for as long as you can swing a hammer. Buy a house every 24 months...in the winter when it's best to buy. Sell a house every 24 months also, but in the summer when it's best to sell.

Doing this, you always own two houses, the house that's on the market for sale is the rental house, and the one that you're about to move out of is going to get rented, so it shouldn't have to be shown too much before finding someone for it.

There will be a little less stress for the kids and yourselves this way, partly because you can buy when the deal is there, and not have to move right in until it's habitable.

Good luck on the ladder!

Answer 4

Maybe a just as effective a plan would be to live in and renovate one house every 2 years. That way, you make money off the increase in value from your remodel AND from normal appreciation of your property value. That keeps the moving down and provides a better environment for the kids. You can have the same results.

Answer 5

It was a good idea about 2 to 3 years ago, but the housing market has slowed waaaaaaaay down.

I wouldn't really worry about the kids much. They'll still be in the same school with same friends so it won't affect them in the long run, they're pretty adapatable buggers.

Basically do some reasearch in your area, but right now it seems like a pretty great risk, atleast where I live.

Answer 6

why not live in your house and buy houses that need to be fixrd up and sell them on contract or lease to own and pull the money out of them to fix them up and to put in your pocket? This is like getting your profit up front and houses always sale one way or the other. And you dont have to keep them long most of the time 18 months or less.

Answer 7

I would hate to be your tax accountant. If you buy and sell real estate within one year, you have to pay taxes at the ordinary income rate. To avoid capital gains taxes, you would have to own and live in a property more than one year, sell it, then buy a more expensive property.

I would not do what you are considering. Your family life would be disrupted for five years.

Have you considered running your own business buying fixer-upper houses, rehabbing them and selling them at a profit? You would not have to move. All of your expenses would be business expenses and therefore deductible. For example, your business buys a pick up truck. All expenses for the truck, for maintenance, for gas, for insurance would be deducted from gross profits.

Answer 8

i'm no longer too specific approximately this yet they constantly say anticipate to spend approximately 25% of your earnings on one toddler. so which you will possibly desire to offer for him to pay 12.5% of his earnings to be truthful, even nonetheless i do no longer recognize how plenty greater you finally end up spending on twins, no count number if that's double or extremely much less, so which you will possibly desire to artwork this out subsequently. on the different hand, probably a greater effective thought extremely in case you have the persistence for it, from the initiating of next month you will possibly desire to shop receipts of each and every thing you purchase on your toddlers (only set aside a diverse wallet for those and slip the receipt in there each time you place money into one or the two certainly one of them). on the tip of the month you will possibly desire to calculate mutually how plenty has been spent, and agree he will pay 0.5 of that quantity each and each month (if he does not think of that's truthful you will possibly desire to point doing it for 3 months and looking out an commonplace quantity from the three months and dividing that in the time of 0.5 and having this as his charge). additionally i think of it would be truthful to point that any time something costly must be paid for for them (college/nursery expenditures, college journeys while it includes it, new beds, and so on) which you narrow up the fee down the midsection. i do no longer think of a sensible man or woman might desire to discover fault with paying 0.5 in the direction of his toddlers, and if he thinks that's too plenty then on your footwear i might play the "careless father" card! stable success hun, sorry to pay attention approximately your wreck up. X

Answer 9

yes im sure its alot of hard work I htink theres a good tv show to watch about that.called flip this house