House flipping, rental property investing, wholesaling, and every other type of real estate investing has had an incredibly profitable run-up over the past two years. Days on market shrunk as buyer demand soared and supply dried up. Flippers, rental property investors, and everyone in between saw profit margins they couldn’t have imagined before. But, now that may all change.
Rising interest rates have stopped many would-be homebuyers from making offers, forcing them back into renting instead of sending in over-asking bids. Now, home equity and flipping profits are starting to see a lag, as mortgage applications significantly slow down, showings become far less crowded, and price cuts become the new norm. Are we at the beginning of a real estate recession, and if so, how can we best prepare to still profit during the downturn?
James Dainard, master flipper, investor, and “On The Market” guest, has had to readjust almost every way he analyzes real estate deals. He’s managed to cash in some serious flipping profits over the past two years but understands that this year will be different. He shares exactly how smaller landlords, real estate investors, flippers, and wholesalers can “pad their profits” so they don’t get burnt on their next real estate deal.
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00:37 Between the Headlines
03:01 Market Forces: Demand vs. Supply
05:40 Market Forces: Price Cuts vs. Selling Over Asking
12:11 Housing Market Fear
13:43 Due Diligence: What is a Good Deal in 2022?
28:56 Cash Flow and The 1% Rule
33:58 Has Flipping Flopped in 2022?
49:29 Start Padding Your Profits
51:06 Crowd Source: It’s Time to Trade Up