As I was looking through past blog posts for this weeks post, I came across one from March that stopped me in my tracks. It was titled “should you invest in real estate during a recession.” I wrote that post just a couple of weeks after Covid 19 became a concern in our country. One of the reasons I wanted to share these thoughts was because I felt like everywhere else I was looking the outlook was one of negativity and panic. But as someone who has built a business for the past 13 years in real estate, following the masses isn’t something I usually do.
In a matter of days everyone who was an expert or financial professional began to say, hold your cash, the marketing is going to crash, sell anything you’ve got now or at least in the next 90 days. Pretty much impossible advice for most real estate investors.
Some of these thoughts were realistic but they were not certain. As you well know, this is something completely new for our country and economy.
What I personally struggled with when all of these opinions began to come forth was that it felt as though for all the unknown these people were absolutely certain that real estate was going to go the same way as it had in 2008….even with no historical point of reference. Isn’t it funny how everyone wants to be right when it comes to predicting a downturn?
So I am going to share what my business has looked like over the past 90 days.
To begin, we purchased our most expensive flip on March 11th. We had submitted the offer in mid-February and during the time before closing had been getting the bids, permits and renovations ready to begin.
There were also 3 other projects we had that were in progress. One was completed the first week of March and we listed it on March 11th. On the first day we were happy to accept an above price, non-contingent offer.
Once that was settled, then it became an issue of how to navigate all the other pieces of the home selling process in a Covid environment. Thankfully, all real estate and construction business was considered essential in our state. A lot of the required steps like the inspection and appraisal were easy to do since they only required one person.
Our next project that we completed was in May and again it sold in a single day. Since we were accustomed to working within the guidelines, it was much less stressful.
During this time we were selling houses we were also continuing to look for projects to buy. Once the initial shock and delay happened in the spring market, the buyers came back strong. We continued to look at all the estimates for renovations and offers with the idea that if those numbers worked now and could even work with a 10-15% decrease, then we should still keep going.
The funny thing is that for many buyers, finding the perfect home also took on a new sense of urgency. Spending more time at home made some of the amenities non-negotiable.
One of the things we started to do as well was wire the houses for wifi. With work and school happening at home this was a complete necessity for many people. Plus, we wanted to do what we could to make it easy for people. Many cable and wifi companies were booked for weeks out and refused to schedule appointments in occupied homes. Since our properties were vacant we were able to handle this detail during construction.
Something I had not experienced in awhile was the sudden shift in lending. There were some lenders (bank and private) who immediately changed their guidelines. Some shut down their programs altogether. While this impacted us somewhat, I have been an advocate for having multiple options when it comes to lending.
Another trend I’ve noticed is that the list of people looking for houses had not subsided. Even those who are staying put are looking for renovation and design inspiration. Both from a personal standpoint and also from a resale perspective. Many people are selling their homes and using the equity to purchase their next house.
After a few months it has become even more apparent that the housing market is strong. And with Covid as part of our everyday lives, people seem to be even more committed to their personal surroundings. Which makes this a great time to continue to be able to offer renovated homes that offer the ease of being able to simply move in and enjoy.
Ready to take that next step when it comes to flipping?
Now that you know about the timing for a flip, here are some additional resources to help you get the information you need to move forward on creating your flipping life.
Make sure you have the Fixer Upper Checklist so you know which areas are key to added value in a home.
There are several videos available on finding houses, renovations, and funding on the Threshold Homes YouTube Channel. Check out your favorite flipping topics and new videos weekly.
You can’t close a successful and profitable flip unless you start. What is your biggest challenge is with getting started house flipping? I’m here to help.
Amber
Want to buy a property and renovate it?
I have a freebie checklist that will help you — 8 Things I look for When Purchasing a Home. Just click here to download it.
Love before and afters?
Follow us on IG @thresholdhomesmn and FB @thresholdhomesmn to see the projects we’re working on. And for more ideas on renovating & restoring fixer-uppers!
Looking to buy a house to renovate? Check out the fixer upper checklist to help you find the house with the most “flip” potential.
For more inspiration follow me on Pinterest @thresholdhomesmn
So many financial gurus are screaming that the sky is falling … but the market shows otherwise! We put the offer in our house the same day a pandemic was declared and it was SO easy! Everyone from the home inspectors to the lender shifted to our new reality … the inspectors sanitized everything they touched and gave us a really nice PowerPoint presentation instead of an in-person explanation. The lender waived the appraisal and asked us to sign a doc agreeing that we wouldn’t take advantage of any mortgage relief programs. The closing company had a glass panel set up in the middle of the table and had us sign most of our paperwork electronically. People should not be afraid to buy or sell right now … especially sell! We need the inventory 😀 I live in Louisville, Kentucky and the market is boiling over!
Thank you for sharing your experience! So glad to hear that everything went well. Enjoy your home.