What’s Impacting Flip Margins Most in 2026?

Question

Is it:
• Holding costs?
• Contractor timelines?
• Purchase competition?
• Financing delays?

What are you seeing in your market?

Bo Smith · Answer

Contractor timelines. Holding costs scale linearly with timeline, and every week stretched is a full percent of margin gone. You can't control material costs anymore, you can't control purchase competition, and financing delays happen. But contractor discipline is something you can actually influence on the deal.

Days on market dropping is helping, but it's not fixing the core issue: your deal window is shorter because you can't hold inventory as long. Fast sales are good, but they only matter if your margin is still there to begin with. If your acquisition price and rehab budget are already razor-thin, fast exit doesn't help.

What I'm doing is building tighter timelines with penalty/bonus structures built into contractor agreements. It costs more per deal, but it de-risks the holding period significantly. You're essentially buying certainty on timeline, which is worth paying for. What's your current incentive structure with contractors -- are you paying fixed price per scope, or are you trying to manage timeline separately from budget?