Glenn writes: Do you think with recession, interest rates rising, etc. one should off load/assign instead of fix and flip? Ideally if I were to fix and flip, I would want this one to hit the market in March of next year. Thanks in advance
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Welcome back to real investing. I’m Tim Herriage. Thank you so much for swinging back by today. Glen ROS, do you think with the recession interest rates rising, et cetera, one should offload or assign instead of fix and flip. Ideally, if I were to fix and flip, I would want this one to hit the market March of next year. Thank you in advance Glen. This is a great question. It’s one of those things that many people don’t understand about this business is here. We are in August and you’re trying to load your pipeline for six months from now. And when you’re dealing with that long gap in time in an unstable or uncertain environment like we have right now, uh, I can, I can see where you’re coming from. So I, I’m gonna answer your question and then I’m gonna give you some different things to think about.
So number one, if you’re in a good cash position and have good reserves and you feel very comfortable and you’re not worried about income right now, I say you don’t, you shouldn’t change your strategy. Okay. Now, if you’re someone that got really overextended and maybe you have some high interest debt or don’t have a lot of reserves, I think you go ahead and offload wholesaler assign the property and, and build your war chest and kind of be safer right now. Um, if you’re looking six months out, the next question I’d have is like, what’s the value of the house? Cause I’d say if you’re at or below the median home price, I don’t think that there’s, I hate to say anyway, but I don’t see value being less than they are right now, six months from now in the median home bracket. Now, if you’re in the luxury home bracket or the vacation home, uh, market, or, you know, beach front condos, ah, maybe not, maybe, maybe not take on something that’s a six month window.
Um, you know, those, you know, there’s, there’s still people calling for 8% mortgage rates. I don’t see it. The math’s not there for me, but if it’s a large project, I, I’m not sure I take it on large, long projects. I probably don’t take on if that makes sense. Um, so yeah, I mean right now, I, I think, look, if you’re a flipper and you’ve got a good balance sheet, you’re comfortable with your inventory level and your reserves levels, uh, yeah, go ahead. Keep fixing and flipping man, make a bunch of money. Now, if you’re in a luxury home market or you’re starting to miss profitability numbers or your business, isn’t performing well, I don’t know about taking on a big project. That’s gonna take six months. So that’s my answer, Glen. I hope that helps if it didn’t help or if you have more questions hop on over to I, I have lunch, money.com. Ihavelunchmoney.com. Submit your question. Tell me what I missed on reply to the email you get from me personally, whenever you, uh, submit a question and I’ll see if I can help you out more. So everybody out there, I appreciate you taking the time to listen to me today and hanging out with me. I’ll see you tomorrow.
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