2026 appears to be another challenging year for investors but there is more to the story than just numbers. Flipping houses from 2020-2024 was easy. Prices were elevated and costs had not yet risen to today’s levels. Buyers were everywhere and homes were in short supply. Especially affordable homes. Interest rates were low but rose sharply. What has changed in 2025-2026? Costs have risen across the board including labor, materials, insurance, etc. The 10 year treasury remains substantially above 4% and so interest rates remain “stuck”. Buyers are more picky then ever and so average to below average finishes no longer are acceptable because buyers can continue to live rent free and so the motivation to purchase a below average home is zero.
The opportunity, however, is for those professionals who can weather the storm and have a a solid team in place who can “execute”. Execution is the name of the game; like it has always been. Can you buy right, execute renovation quickly and on budget, and leverage and execute financing? Do you trust your team and have a repeatable plan in place? If not, it’s going to be much more difficult to succeed in today’s marketplace.
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