the payment, which is directly affecting affordability and driving down prices,” he said, noting the downturn has been especially quick and dramatic in “cookie-cutter neighborhoods where the iBuyers pulled out.” FALLING-PRICE FLIPPING In this unpredictable and unstable market, Kearney is not relying on external forecasts or even his own gut to guide his buying and selling decisions. He’s taking what the market gives him and quickly moving on to the next deal. “The most dangerous thing we can do right now is what we think or feel,” said Kearney, whose primary strategy in this market is to buy, renovate, and resell to owner-occupants and also wholesale to other investors. “Move your property. Listen to the market. Sell the property today at today’s market price.” For Kearney, that means maintain- ing an inventory in a narrow range of between 15 and 20 properties at any given time. “As a seller, if something is sitting out there a couple of weeks and it’s not selling, the price is too high,” he said. “If it’s not moving, change the pricing so it does move. These are market-based decisions.” Kearney is also mitigating the risk from falling home values by being highly selective in his acquisitions. “We try to buy properties at a price where it doesn’t matter what the market does,” he said, describing most of his deals as “unique” situations. “We’re problem-solving. That’s how we’re able to find value.”
rental property portfolio during the emerging market downturn. Atlanta-area investor Tony Tritt experienced that risk firsthand during the 2008 downturn. “The mistake we made … when the crash came, we didn’t have a bunch of cash in the bank, so we had to pass on a bunch of $25,000 housing,” said Tritt. He added that he was advised by an older, veteran investor at the time to liquidate some of his existing rental inventory, so he’d be
able to purchase deeply discounted properties during the downturn. “We didn’t listen to him,” Tritt admitted. “We bought a lot, but if we had sold all our houses like the gentleman told us, we would have bought a lot more.” •
Daren Blomquist is vice president of market economics at Auction.com. In this role, Blomquist analyzes and forecasts complex macro and microeconomic data
LACK OF LIQUIDITY A different type of risk exists for investors looking to bulk up their
trends within the marketplace and industry to provide value to both buyers and sellers using the Auction.com platform.
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