Is it a bad time to fix and flip do to the virus?

Question

I’m stationed near Seattle and I’m finally ready for my first fix and flip deal. Now that the virus outrage is happening.. I’m second guessing myself and thinking I should wait. Any thoughts?

Michael Haas · Answer

I'd be very selective - I do believe that there is never a bad time to buy a good deal, but I personally feel far better about Buy-and-holds than Fix-and-flips right now. Buyers are adopting a "wait and see" mindset, so you may find the market softening significantly, with many buyers postponing their home search by the time you finish your flip and list it.

Account Closed · Answer

@Austin Fry if the numbers match up to your criteria and you feel ready from your education and preparation, there can be opportunities that arise from the downturn. In volatile times you need to make sure that you are even more disciplined in following your numbers and sticking to it.

Jordan Moorhead · Answer

@Austin Fry personally I would wait unless you can just get a killer deal. The market you buy in will absolutely not be the market you sell in. I could be completely wrong but I would not buy anything that didn't have a 3-5 year hold plan right now.

Nathan Estochen · Answer

Take into account what a buyer for your flip would look like based on price point. Are they at an increased chance of being laid off? Service industry is being killed by bar/restaurant closings. Tech and other companies already on board with working remote policies, not so much.

Brian Roberts · Answer

@Austin Fry

I would be careful if I was in your situation. Being that it is your first flip the Coronavirus just adds another hurdle in your journey. I would guess that if you ask any flipper,their first project didnt go exactly as planned. Budgets go over, holding time increases.

The biggest thing that you should consider is how much cash reserve you have. Can you survive if your reno costs 20% more than anticipated? Can you hold the property for an extra 6 months and still make enough money to make it worth your while?

People who have a track record,systems in place and large cash reserves can continue without to much hesitation. For a first timer you would be foolish to not take extra precautions. Not saying that it's the wrong time or right time for you. Be sure of your numbers and know that it will probably cost you more time and money than you anticipate.

Dave Charron · Answer

Personally I am concerned that the houses will sell. I have a flip that will be finished in a couple weeks and have no idea what will happen.

Pratik P. · Answer

To add to what others are saying, I don't think the virus should prevent you from flipping. I have 2 flips coming to market pretty soon. I'm not anticipating any serious issues selling them. Maybe longer days on market? We'll see. If I was a buyer, I'd be looking right now because interest rates are looking pretty delicious lol

I would just make sure your numbers are accurate and you're buying with decent spreads. Now is not the time to buy "risky" flips with thin margins. I would also run your numbers from a rental standpoint and see if market rent will at least cover the expenses.

Will Barnard · Answer

What about the virus is causing your fear to prevent you from starting your first flip?

Real estate mortgage loans have just hit record lows and the fed just lowered the rate to near zero. This creates more purchasing power for buyers. While the immediate situation is a bit crazy, I am confident we will get a handle on this and things will be back to normal in a few months - 6 months. The real question is, can you find yourself a real deal with a real spread! If so, get it done and learn from doing in the real world.

Greg Dickerson · Answer

No need to wait if the deal is right. Keep moving forward and pursuing opportunities as some people will be more motivated to sell due to the situation and or stock market as well. There are going to be some good deals out there but you need to know the market, how to estimates costs and values and how to get the work done efficiently and effectively.

Is it a bad time to fix and flip do to the virus?

Is it a bad time to fix and flip do to the virus?

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