DIVERSIFY YOUR INVESTMENT STRATEGY: MAXIMIZING THE EVOLVING REAL ESTATE MARKET by Gina Comeaux, Civic Financial Services
I n today’s dynamic market you need more than just one real estate investment strategy. Redfin recently reported 61% of homes during the last week in March went under contract in less than two weeks — the fastest pace on record since the company began keeping track in 2012. With the inventory shortage it is no surprise that homes are selling quickly, and this is where pause should be given to reevaluate your options at hand. Fix and flips are still highly profitable (albeit with a pivot in strategy), tapping into equity-filled properties is proving recapitalization to be quite lucrative, and long-term rental investments are yielding major returns. With the single- family rental market on fire, there are options for your investment dollars and the most important thing as an investor is to have capital when you need it to seize these opportunities. STRATEGY #1: FIX AND FLIP According to ATTOM Data Solutions’ 2020 U.S. Home Flipping Report, profits on flips are at record highs — even despite a decline in flipping activity with properties being hard to find.
materials are quickly outweighed by the premium sell price on the other side. So while fix and flips will currently cost you more in today’s environment, the seller’s market ensures there are ultra-high-dollar opportunities to be had. Whether fix and flip is part of your current strategy, or perhaps one you are contemplating, consider this: EXPAND YOUR GEOGRAPHICAL FOOTPRINT: Living in one state doesn’t preclude you from owning investment properties in others. If you’re feeling stuck on finding profitable markets in your area, it may be time to do your research and branch into new territory. FROM ‘FIX AND FLIP’ TO ‘FIX AND HOLD’: If your strategy has only been fix and flip, now might be the time to convert into the legacy wealth of long-term rental properties. If long-distance land lording isn’t for you, and the markets you’re most familiar with are saturated, diversify in a slow ramp, or in a mix, to ensure you get off on the right foot. HAVE YOUR FINANCING IN ORDER: When you find a good deal, you have to move quickly to acquire it. In today’s highly competitive market, sellers are less willing to accept contingencies or wait on lengthy financing. Partner with the right lender, such as Civic Financial Services, to
Par for the course in flipping “risk vs. reward”, premium purchase prices and increased costs for labor and
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