Home Flipping in 2022

Is it the Right Time to Invest in Real Estate?

I often get the question:

“Is Home Flipping really a good idea in 2022?”

It’s a fair question, and shows that the asker is doing their due diligence researching the pricing and competitiveness of the market. Perhaps you’ve been wondering the same thing yourself.

I always respond the same way. The best time to invest in Real Estate was ten years ago. The next best time to invest in Real Estate? Is NOW. Ten years from now people will be asking the same question and looking back at 2022 with the same wish.

You won’t be buying at the lowest point in the history of the market, but you almost certainly won’t be buying at the highest either. It’s harder to trust that truth when you can’t see the future (and CAN see the results of the past) but it’s the truth nonetheless.

2022 possesses its own sets of challenges and difficulties, that’s for sure. When we first got started, we were able to find both on market and off-market deals with little difficulty. Now, there are many investors hopping on every purchase opportunity from multiple outlets. To make things worse, there are often inexperienced investors who are paying for property over market value, along with institutional buyers and large corporate hedge funds who are buying homes in the hundreds.

Digging for Diamonds

These new difficulties only mean that we have to work a little harder to find a deal or off-market deal. When the gold and diamonds are worth more, we dig a little harder and we dig a little deeper to find them and claim them as our own.

The best part is that we can use this hot market to our advantage. One house, for instance, has the ability to be sold several times through wholesaling. You can sell a house in wholesale fashion to another investor for upwards of $15,000 and sometimes even as high as $100,000 in busy markets like Las Vegas and California just for selling the paper!

The same applies if you’re looking to renovate and flip the home. In 2022 you’re going to have a plethora of buyers all looking to purchase whatever you put on the market, all of whom are willing to pay your asking price and more. We just bought a house in Upstate New York that we put on the market for $279,000 and sold for $305,000. $35,000 over our asking price, and we were already pricing it on the high end to begin with.

What does that mean for you? It means you just need to dig a little deeper to find the off-market deals and use this information to your advantage in the frantic market of 2022.

Luckily, we do teach the best ways to acquire off market deals in our Home Flipping Workshop, which is worth checking out if you’re trying to learn more information about finding these off-market deals and digging deeper for the gold and diamonds that are, in fact, out there.

Market Adjustments

If we’re talking potential downside, there is always the possibility that the market could make a shift. Historically speaking, the market is going to adjust itself at some point.

It was my opinion, and the opinion of many experts, that it would have happened long before now. As much information as we have, none of us are psychic or have the ability to predict what the future may hold.

Regardless of it all, it’s my thought that even if we should find ourselves within a market adjustment, it will look nothing like the one in 2008 (which seems to be the big concern for many). Why? Because in 2008 the crisis was induced by real estate itself. Here in 2022, the cause, if it were to happen, would be an economy that is deeply influenced by inflation and supply and demand.

With that said, there is always the possibility for a change in the market, and it’s something we should be knowledgeable of and prepared for.

Protect Yourself!

How do we protect ourselves from the potential for a change in the market?

Don’t expect appreciation on your purchase.

Back in 2008 many investors had properties in Florida, Vegas, or California, and were relying on substantial amounts of appreciation. Some even made the choice to buy plots of land with no intention for them but to sell in six months, totally counting on inflation and appreciation to provide them with their profit. When the market crashed in 2008, and they didn’t get their expected returns, it was a big setback for many.

You can avoid that by buying for what the market tells you the property is worth right now. If your house is looking like it will sell for $500,000.00, don’t lie to yourself and suggest that it will be worth even more in six months. Don’t add numbers assuming you’re going to take advantage of appreciation. 

That is speculative investing, and is very risky.

Make 2022 Work FOR YOU.

You can do this. Be sure to remember to always use real numbers using today’s math. It can be tempting to look at the possibilities of appreciation, but know that nothing is guaranteed and you can only count on the way the market is looking right now.

Even with up-to-date information, the market is always changing. That’s why we need to get in and get out as fast as we can. If you can do that with the off market deals I mentioned previously, you are going to find a whole lot of success here in 2022.

We’ve had the luxury of working Real Estate through a number of different markets. The markets change and will continue to change into the future. There will be times with more houses selling and a larger inventory available, and times when the demand is significant such as it is right now.

If you stick with us, and particularly if you join our Home Flipping Workshop, we can teach you all the tools needed to take these steps, including finding those off-market deals and taking advantage of the ups and the downs in both the short and long term.

The waters change. Sometimes they’re smooth sailing, and other times the water is short and choppy. It’s important to be able to ride the tide however it comes toward you.