A would-be investor recently asked me if this was a good time to 'flip' properties. Georgia agents are not allowed to use this term as it has taken on a negative connotation but I offered my advice on investment properties to this person: Even a seasoned pro would have a very hard time renovating properties for resale right now. The recent slowdown and wide media coverage on declining prices have many people considering first-time real estate investment but the truth is usually much different than the popular 'house flip' shows portray.

Many would-be investors who think they want to learn how to 'flip' a house in fact don't even own the home that they live in! I admire these people's ambition but usually offer the following advice which is geared more towards long-term investment and can work well in today's market:

• Buy a reasonably priced home to live in as owner-occupant(in the Douglasville area this is typically the $100K range)
• Reasonably renovate the home, leaning towards low maintenance solutions such as linoleum and hardwood floors, not carpet which is easily ruined
• Locate another home like the first for sale
• Find a tenant for the first home
• Purchase the second home as an owner-occupied home
• Move into the second home, lease out the first, repeat the cycle

Always check with your lenders prior to executing this straegy as you want to make sure you meet their restrictions which are typically few after the first year or two. This strategy works well as you build 'sweat equity' renovating the homes and since you are purchasing each house as owner-occupancy you don't have to worry about the larger 15%-20% down payments usually required for investment purchases. This strategy can even be used with no-money down purchases to get started. You won't get rich and typically are lucky to break even but it is an excellent tax shelter and long-term investment which is realized when the mortgages are paid off and you realize that your tenants bought all these homes for you.

The Atlanta Real Estate guru John Adams has a similar program called the 7 Year Itch which calls for investors to purchase two homes a year and 7 years later begin to pull equity out of them to the tune of $75-$100K a year. It's definitely worth looking into if you are a serious investor.