In this video, seasoned house flipper Joe Homs (40+ years experience) explains the "live‑and‑flip" strategy—buying a property, living in it while renovating, and selling after a few years. He shares his own history of repeatedly remodeling a single home, outlines why the approach should be limited to the first two years to capture primary‑residence capital‑gains tax exclusions, and details how the appreciation can be sold tax‑free up to $250k (or $500k for married couples). Homs highlights additional advantages such as flexible timelines, DIY cost savings, and access to financing options like FHA 203(k) loans that escrow renovation funds. He then balances the benefits with drawbacks: ongoing mess, blurred work‑life boundaries, limited scalability for a solo flipper, and heightened stress. He advises viewers to assess time, skill, patience, and family willingness before attempting a live‑in flip, and points newcomers toward hiring a general contractor if appropriate. The video ends with a call to action to like, subscribe, and reach out for help.
Chapters
In today's video, I'm going to talk about the pros and cons of a live and flip. Coming up next. I've been flipping houses for over 40 years. I've seen it done in many different ways. One of those ways is called the live and flip, where you live in the home as you remodel it. Personally, I actually started out with a live and flip. In that we bought the house, it was just a basic house, and we decided as the money needs came in and as the money grew, we would take parts of the house and remodel them. So for example, we started out with taking the popcorn off the ceilings, which is a big chore, and I actually did that myself to save some money. So we took the popcorns off, then we had to retexture all that stuff and put trowel to it and make it look like what's called knockdown, and then repaint it after that. Other things that we did, we remodeled the kitchen 3 times, believe it or not. I've been in this house for over 40 years, and I've remodeled that kitchen 3 times. Flooring probably same amount of times, 3 times, and, and then other things. So I've got new windows, the backyard had a new balcony installed. So as we lived in the property, we actually started fixing it up and making it look nicer at the end of the day. What you want to do actually in a live-in flip is do this within the first couple of years because you want to hold on to that property for a couple of years for tax reasons. And as the market goes up like it is now with the hyperinflation, you fix it up in, in that couple of years, you make it look really nice, and at the end of the day you put it back on the market, you sell it for a premium, and then you move on to the next one. Go buy another one, Do the same thing over and over again. But is it right for you? Let's explore some pros and cons. I want to welcome all the new faces to the channel. I made this channel for the new and experienced investors, those who want to create the life they've always wanted through real estate. So do me a favor and hit that little like button so that I know that you're following along. So pro number 1, if you live in the property for 2 years, And the property value has gone up significantly, you as an individual will not have to pay taxes on that gain up to $250,000. If you're married, then that goes all the way up to $500,000. So this is a great way to build wealth. You buy something, let's say for $400,000, it appreciates to $600,000, so there's $200,000 worth of appreciation, and you pay zero taxes on that. You go buy something else and you just continue to do the same thing. Do you have to put all that $200,000 into the next property? No, that's an old rule. You don't have to put any of that back. But obviously, if you're going to buy something more expensive, then you're going to have to be able to afford a larger payment because you are going to get a loan. So, a great way of building wealth. Don't stop there. Continue to do that until you're in your mansion. Okay, so let's talk about another pro, which may not be a pro, but there's no timeline on this, okay? The timeline I just gave you was 2 years that you should stay in the property so you don't have to pay capital gains. So you have a lot of time to work on these projects, okay? And now that really depends on you, your situation, And whether you have a girlfriend, spouse, or significant other looking over your shoulder and saying, no, you don't have 2 years to do this. I want it done right away. So that can be a pro or it can be a con. Pro number 3, you absolutely save money if you do it yourself. It's not hard, okay? Go buy some paint and start painting the walls. Flooring can also be easy, especially nowadays. There's vinyl plank flooring that literally snaps together and you just put it down. It's called a floating floor. It's not that difficult to do. Just make sure that you get it straight. You know, you could probably do that project in less than a week and save that much money on that project. So finish one project, go on to the next, make sure you have a consistent plan throughout. And maybe that's the first thing you need to do is figure out, okay, this is what I'm going to do: kitchen remodel, bathroom remodels, painting, flooring, and then work on the outside at that point. Pro tip number 4: you might have more mortgage financing alternatives. Okay, especially if you're going to do FHA. FHA has a 203 program, which basically you buy a fixer-upper, they figure out how much it's going to cost— you and they figure out how much it's going to cost— they put that money into an escrow, and then you draw that money as you fix the property. So that's also a great alternative that you can actually use an FHA loan to fix up the property as well. Now let's talk about cons. Okay, the biggest con is your house is probably going to be messy depending on the project. You know, a normal kitchen remodel on a flip that we do, that may take 2 or 3 months depending on what's being remodeled. If you're doing it yourself, it may take you a lot longer than that. So you're going to have to make sure that you order in from one of these services, or make sure that, you know, you're not going to starve to death because you don't have an oven in place. So be careful. Number 2, work and relaxation can get a little blurred. Okay, if you're working your 9-to-5 job and then you come home and you look at that mess and you want to start tackling it You know, you're going to look and look and look and start doing something and you're not going to know when the end of the day is. Okay, so be careful, time out your projects, make sure that you have time for them, and make sure you have time for yourself. Con number 3, this is probably not scalable. And it's like when I first started flipping property, I was actually in there with a tool belt and a hammer. I was literally working every day on one project. But you really can't scale this out to anything else. You're one person. I can't work on 3 projects. That's why I need a contractor to have the ability to put many of his men, contractors, subcontractors on different projects. So it's not scalable. But it can be rewarding at the end of the day. Con number four, probably the most important: it can be very stressful. Okay, again, you're coming home from nine to five. You worked hard all day, and you're looking at a kitchen that was just demoed a week ago. You don't have dinner ready. You know, you're not ready to cook because. Because there's no stove there. So it can be very stressful. Even with all the tips and tricks in the world, a live and flip is not for everyone. You have to be honest with yourself and ask, do I have enough time? Do I have the skills needed, or am I willing to learn? Am I patient? Is my family willing to take the burden as well? If you answered yes to all of these, then it might be a good way to get started in flipping. If you're new to flipping, then click on this video right here and find out if you should just hire a general contractor for your project. As always, feel free to reach out anytime. I'm here to help.
