When the housing market is in a downturn, purchasing and flipping houses becomes much more tricky, especially as you simultaneously work to keep your business afloat. However, it is possible to turn profits amidst a market crash with a little finessing. Utilize the following tips to aid your business until everything settles back to normal.
Buy and Hold
Usually, fix and flip businesses want to make a profit as soon as possible, but in a downturn, you may not be making as much profit on your renovations as you normally would. You can still buy homes and fix them up, but don’t sell them right away. Instead, rent them to a tenant. Renting allows you to profit from monthly payments that will help pay the hard money lender in Oklahoma City, or whomever you received the loan from. Once the market opens up, sell the home for a potential profit.
Buy Cheaper Homes
To weather the storm, tweak your budget and search for more affordable homes. If you can spend less on the home, spend the same as you usually would on repair costs, and sell the home for a little less than you normally would—it will help you make a slight profit. A market in a downturn encourages buyers to make offers on a home, which allows you to pick one that could benefit your business the most.
Search for Foreclosures
If the market is in a downturn, you can expect to see more foreclosures than usual. This makes flipping houses easier because banks sometimes own the foreclosed homes. The previous homeowner or bank is likely eager to sell the home for a lower price because of the foreclosure. Take advantage of this during a downfall because it could allow you to invest less in the property yet make a solid profit in return.
All in all, be patient because the market will not stay down forever. Take advantage of a time like this by re-evaluating your company and ways to do business in the future. You can still make a profit during this time, but not as easily as you did in the past.