My wife and I want to do a live-in/flip real estate purchase. The idea is to buy a fixer-upper and rent out the basement to help with the mortgage payments. What do you think about the idea?
I love real estate. Iíve flipped a few houses in my day too. But the particulars of the deal make me a little nervous.
In a situation like this you need to do a basic business analysis. Youíve got to have a plan and figure out the worst case scenario. Part of this is determining whether or not you can survive if things fall apart. In this case, the worst case is that you canít get a renter and the house
doesnít sell. It puts your family in jeopardy if this happens, so to me itís not an option.
Honestly, I think youíve got house fever right now. The possibility I just mentioned isnít a rare occurrence. Lots of people have had the same idea, with the best of intentions, and still end up in a big mess. But if you and your wife are willing to accept the possibility of things not working out like you plannedóand the fact that you might have to take additional jobs
for an unknown period of time just to make ends meetóthen it might be a play. Me? I donít like putting myself into skin-of-my-teeth positions intentionally. When I wore a younger manís clothes, I was willing to do stuff and ignore the risk involved. Going broke years ago knocked that out of me in a hurry. Any deal that runs the risk of leaving you bankrupt, or the victim of a foreclosure, just isnít worth it!