David Ravitz and his wife plan to renovate and sell homes indefinitely. Courtesy of David Ravitz
David Ravitz believes he has cracked the key to building wealth through real estate.
Ravitz bought a home in 2021, lived in it during the renovation, and sold it two years later.
The strength of the market in Boca Raton, Fla. gives him a tailwind for his current investment.
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This essay is based on a conversation with David Ravitz, 31, a real estate agent who has given up the idea of long-term home ownership to build wealth. The interview has been edited for length and clarity.
I grew up living in the same house for 18 years. But most people don’t stay in the same house for more than ten years – they’re more inclined to move and sell.
It’s similar to the job market. Nobody works in the same company for 25 or 30 years. Instead, we move to different companies or industries to have better opportunities.
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I am giving up long-term home ownership
I worked in finance for a number of years. I got my MBA from the University of Miami and then got into the real estate industry. I’ve been a real estate agent in South Florida for four years now.
David Ravitz and his wife. Courtesy of David Ravitz
Every day I view, buy and sell houses on behalf of my clients. Therefore, I am familiar with the market and have a good overview of what is happening in the real estate market.
In recent years, the real estate market in South Florida has boomed and many people have moved here. One hears that prices are flattening out in other parts of the country, but we didn’t experience that at all in this area.
In 2021 my wife and I bought our first home for $960,000 – a four bedroom, three bath ranch style single family home in Boca Raton. The house was in really good fabric but was built in 1996 and needed updating.
At first we thought we would renovate the house and live in it for at least four years before selling it. However, given the strength of the market in the region, our attitude changed. To maximize our profits we moved into the house, renovated it over the course of two years and have now put it up for sale. We plan to repeat this process indefinitely.
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We are not traditional “fix and flippers”
My wife and I are in the wealth building phase and believe this model will yield the best results financially.
The biggest advantage of this model is from a tax point of view. If you’re a married couple and have owned a home as your primary residence for at least two years, you can earn up to $500,000 in US tax-free capital gains. For single people in the USA, the sum is up to 250,000 dollars (around 222,000 euros). This tax treatment offers investment opportunities as your equity builds and the home appreciates in value when renovated. (Editor’s note: For comparison: Profits from the sale of real estate are not taxable in Germany if you have owned them for at least ten years with third-party use.)
The renovated kitchen by David Ravitz. Courtesy of David Ravitz
It definitely depends on which route you take, but I think this approach can work in any market. We believe that buying our home in Boca Raton is a good investment due to the demand for housing in this area. Prices are high while supply is limited and there are a lot of people looking to enter the market.
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We plan to repeat this process indefinitely
It took us two years and $500,000 to completely renovate our home. We have expanded the floor plan and purchased new appliances and furniture. We launched it in June for just under $2 million.
For the renovation of the house, we looked at other renovated houses in our area. To make sure we were saving on the project, I used Excel spreadsheets to keep track of costs. Also, because we lived in the house, I was able to watch our contractors and make sure we were saving where we wanted and where we needed. We stayed on budget almost to the dollar.
The renovated dining area in David Ravitz’s home. Courtesy of David Ravitz
The house has been listed for a month but buyers have been very active – we have received numerous offers. I assume it will be sold in August or September. But no matter how long it takes, my wife and I are in no rush to sell – we love living here and know our investment will pay off.
In a few years we plan to consider another house and start the process over.
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