By Mike Baird
Whenever people find out about my job, my show on Spike TV (Flip Men), or my partnership with Greg to build Property Bank, they always have questions about flipping, how to wholesale a house, and all kinds of other real estate tips. I love answering questions, and I could talk about real estate investment all day long. There’s one question I’ve noticed that comes up a lot more often than others, though. People always want to know when they should buy property.
My clients, friends, family, and professional connections are always asking, “Is now the right time to buy?” If you read the title of this post, you already know the answer, right? It’s always yes! If you’ve found a good deal on a piece of real estate, the worst thing you can do is sit around and wait for the “right” time.
The “Perfect” Time Never Comes
First of all, if you’re sitting around waiting for the perfect market and the perfect flip, you’re going to be waiting a long time. There are always risks with market prices, and there are always unforeseen expenses with flip houses. You can make money in real estate investment in any economy if you take advantage of your options.
It’s Always the Right Time…If It’s a Good Deal
Of course, not all flips are good deals. Sometimes the seller wants too much money for the property. Sometimes you get outbid at auction. Sometimes there is just too much damage and the house needs to be completely demolished. Sometimes the comps in the area aren’t selling for enough money to justify the asking price on the house.
All of these scenarios describe bad deals, not bad timing. If you’re choosy about your properties, and you know how to spot a good deal, you’ll always have good timing.
Remember Your Options
As you look for those good deals, though, remember that you have a few options when it comes to making money off of the properties you purchase. For example, if you’ve bought a flip, and the market in the area is stale, you might want to hold onto it. You can hire a property management company to handle getting and retaining tenants, and you won’t have to sweat the fact that your house isn’t selling right away.
On the other hand, what if you buy an REO property at a killer price, but you find out it needs way more repairs than you budgeted for? Not a problem. You can often wholesale a house like this to another real estate investor who can decide whether to flip or rent it once they’ve completed any necessary rehabs.
Remember – You Make Your Money When You Buy the House
If you need any more convincing that there is no bad time to buy a flip, here you go. You make your money on any flip house when you buy it, not when you sell it. That sounds weird, I know, but it’s true. You’re not making a profit because you’re trying to sell above market value (which is almost always impossible, especially with a flip). You’re making money because you got a great discount on the property and you did the work to bring it back up to market value.
And that is one of the best real estate tips I can give you. Seasoned investors know that flipping is a market-neutral industry. We aren’t dependent on a bull market. When I’m looking at a property and deciding whether to flip or wholesale a house, I really don’t think about the timing at all. In fact, the only thing I’m thinking about is how fast I can get the property rehabbed and sold. And you should do the same.