You need to know that that no matter how sexy flipping for hefty profits sounds to the new investor, at the core it is a grinder’s game.

• The flipper who is not actively working the market and rehabbing a project is not earning anything.
• The flipper is far more exposed to unexpected events, from sudden market downturns to unanticipated problems with a project.

By contrast, a landlord has abundant quiet time to walk to the mailbox to pick up checks (figuratively speaking), for as long as she or he wishes to keep and maintain the property.So long as the property is strategically located and generates sufficient cash flow, and the landlord keeps up with maintenance, is quick to handle occasional problems, and has planned for vacant periods and market changes, the income stream can continue somewhat reliably – forever. And, rental property owners generally enjoy a more favorable passive income tax treatment than the taxes on capital gains from flipping.

Not only is it possible to do, following a dual-track flipping/rental strategy is critical to building a long-term portfolio you can retire on within 10 years, perhaps less.I cannot emphasize too strongly that putting some of your flip profits into rental properties is essential to building an income stream you can rely on, allowing you to step in and out of flipping. Knowing you always have something to cover your own family’s living expenses means you don’t have to feel pressured to rush into a flip project, or a partnership, that doesn’t have all the fundamentals. It means you can take time away for vacations and even family emergencies.

Other strategies to relieve the pressure to find an unending stream of profitable flip projects (not a realistic expectation, or in your family’s best interests) are passively investing in flip projects run by another investor, or joining a private lending group.

Diversifying your income stream with sources of more predictable returns is the basis of any sound investing strategy. You will feel more free to reach for the stars with high-return, higher risk projects, knowing you have a passive income fallback. Do this diligently for 5 or 10 years and you’ll be choosing your retirement date, as well as your lifestyle, at your own pleasure.