Market Corrections and how to approach them

[Yashar E.]

Hello BPers,

As we all spend time analyzing deals and determining “flip” or “buy and hold” I was wondering if anybody here currently runs their numbers anticipating another major market correction.

I am not sure if another housing crash comparable to the last one is possible. In any instance, it seems reasonable to think when a correction does occur, which ever market is hit, there will be issues that trickle down. Some issues would be tenants keeping up with rent and new homeowners buying recently rehabbed homes at the current market prices. These would specifically be problems for Flippers and Buy/Hold Investors

For example, to prepare do you run the numbers for potential rental property based on percentage decrease in rent amount? For Flip properties do you buy if numbers total to 60% instead of 70% of the ARV?

Previous to this past weeks market gloom and more so presently I have been pondering the best way to approach this method. Or on the other side of things, is it necessary to make such preparations? Any insight or past experiences would be much appreciated.