Playbook #063: Residential Fix & Flip
🖼️ The Big Picture
“Fixer Upper” and “Flip or Flop” are the #1 and #2 shows on HGTV, proving that America is obsessed with home improvement. But while a 30-minute TV show might make it look pretty easy to make a quick $20,000, $50,000, even $100,000 or more (after of course, dealing with some drama)... this lucrative business can also be extremely risky.
That's why making sure it fits your Investor DNA is so important before getting too deep into a renovation project.
But let's face it, there’s something incredibly fulfilling… and almost romantic about taking a beat up old house and turning it into something new, modern, and beautiful. Cashing a big check at the end of the day doesn’t hurt either.
While plenty of people have done well (and continue to do well) with this strategy, we have to put an asterisk (*) on this issue and note that what can be a risky game during normal times is significantly more challenging in today’s market.
We’ll touch on the issues in more detail in the Outlook and Risk sections below, but suffice it to say that between supply chain and labor shortages, banks trying to slow down out-of-control inflation with massive interest rate raises, and a touchy housing market… at this point in time, those who pursue this strategy should have very strong Investor DNA alignment.
As with any economic uncertainty, there will be buying opportunities. So if this interests you and you have cash to play with, dive in and keep your eyes open for them.