I talked about the “living nearly free” part in a recent post entitled "A Closer Look at Our Latest House Hack."
Now let’s talk about the “making extra money” part.
How awesome would it be for your home to generate income for you and your family?
Well, that’s what our home has done for us over the years. Each time it made us money, we kept putting all the extra money toward our mortgage until we eventually paid off our house. You can read more in the article "How to Pay Off Your Mortgage in 6 Years."
One way your house can make you a chunk of money every few years is by doing Live-In Flips.
What’s a Live-In Flip?
Pretty much exactly like it sounds. You buy a house in need of work and you flip it while you live in it. Then you eventually sell it for a big, tax free profit!
If you buy a house, live in it at least 2 years, then sell it, the IRS lets you take that profit tax free (up to $500k profit for married couples). It's really an unbelievable benefit! We've taken advantage of it on many occasions!
Here are the steps:
- Find a good house off-market that needs some work
- Buy it directly from the seller at a discount (most important step)
- Move in & begin remodeling slowly over time (either DIY or using a contractor)
- Anytime after 2 years, you can sell it & tax the profit tax free (key is you have to live there at least 2 years)
Live-In Flips are a great House Hack that allowed us to pay off our mortgage quickly & generate extra income for our family! They can do the same for you too!