Strategy for acquisition in current market

[Tim Kimball]

I was watching the "90-day challenge" webinar and David was saying that it's not necessary to "buy the dip". I understand the rationale for this. But, how do you deal with the potential for the equity in the property to evaporate in a down market? Seems like it would be a bad situation to be in the middle of a BRRRR project when home prices drop off significantly. If you're into a project with some hard money and you can't get the valuations to refinance successfully, you're going to be paying a lot in interest. The only thing I can figure is that you have to buy the property cheap enough to have some built-in equity

[Greg Scott]

ding, ding, ding

YES, you should always be buying the property cheap enough that you have some built-in equity.  Also, buy in areas that cash flow, so you can ride out any extended downturn.

If you are using Hard Money, get a lender that can also do conventional.  If you get your rehab done in a month (which means you shouldn't be doing it yourself, hire someone) then the appraisal is unlikely to change.  This is how you take market risk out of your business plan.