Will you still have buyers? End of Tax Creidt & Rates Rising

[Robert Mack]

For all those who purchase properties to flip, what are your plans for the next couple months? Are you still purchasing properties to flip like normal or are you treading carefully due to the credit expiring and the likelihood of mortgage rates rising?
Are you confident you still will have buyers for your properties?

To me it seems that with the rising rates and and no tax credit, potential buyers will FEEL as if they missed the boat to get a deal and at least for a few months will have remorse for not taking advantage of the two which will deter them from buying.
On the other hand, the year is coming into the summer season, so will that have any affect on offsetting at least some buyers worries?

[J Scott]

There will always be buyers. That said, there may be fewer buyers and those buyers may not be willing to the pay the same prices (because they won't be getting a rebate from the government); but the buyers will always be there.

So, you need to figure out how to appeal to those fewer buyers who aren't willing to spend as much.

Here are my thoughts:

1. Make sure you have the best product available in your market;

2. Make sure you have the most inexpensive product available in your market;

3. Make sure you factor in additional holding time/costs into your analysis, in case the buyers really dry up for a couple months;

4. Make sure you have multiple exit strategies on every property you purchase. For example, if you can't resell, perhaps you can rent for cash flow until the market turns around;

5. Make sure that anything you plan to sell after 4/31, you are buying at deeper discounts;

6. Build relationships with the successful buyer agents, as they will be the one who are working diligently to keep the buyer pipeline filled and who will ultimately be bringing you your customers.

If you can do those things, you should still be able to make plenty of money flipping houses.