Flipping

If one is familiar with the property arena, one would have heard 'flipping' before. A person who flips is called a flipper and I am aspiring to be one with my newest project in hand.

According to Wikipeida, 'Flipping is a term used primarily in the United States to describe purchasing a revenue-generating asset and quickly reselling (or "flipping") it for profit. Though flipping can apply to any asset, the term is most often applied to real estate and initial public offerings.'

Although it's a term primarily used in the USA, I think Malaysians are also quite well verse on this currently.

Of course there are some risk towards flipping. Short term wise, if assets that you purchased fails to attract a new buyer, then you would face the risk of holding on to that property with a burdening mortgage or burning away the deposit that you have placed. But long term wise, as those value investors put it, once that asset is sold, you no longer enjoy the benefit of its' value and most of the time the profit earned is much less compared to the future value.

Of course being a bias that human are, at a particular point of time, one side of the view will be more favourable compared to the other side. Take for instance, if today I am a cash-tight but greedy investor around 30 years old, I have not develop the taste of tasting the future value therefore I would very much prefer to flip it for an immediate profit and buy my dream car from the profit.

However, if I am a multi millionaire who appreciates value investment, I would keep the asset that I purchase and receive the rental monthly for my retirement.

Do I flip?