First timer. How do you flip in a "potentially"declining market?

[Joey Chrisman]

First time investor here.... well I have owned my own house since 2010.   I have experience renovating my own home as well as adding on an addition... hired a general to get the project off the ground at first but then did the general contracting role once the framing was up.  Kind of surprised at how relatively simple building a house is after you see it done.  

Anyways I'm in the Phoenix market and I'm finally starting to see some deals popping up. Im looking for a property that requires some fixing up and or significant fixing up/additions. My question is how do you base your purchase price of the flip when the market is potentially declining? Is it best to just sit out the market for a bit letting the market simmer a bit for better deals or does it make sense to be making offers building a buffer for a potential decline in the sales price... I wouldn't mind finding something for a rental but damn... the cash flows seem like they suck even with a 25% down payment at todays rates on say a 350k SFH. What strategy are you guys using to profitable pick up rentals/flips/fixer uppers. Thanks!

[Scott E.]

If you're going to buy a property to flip, or buy a property to hold a rental, pick a sub market and start studying it obsessively over the next couple of weeks.

I'm currently shopping in 2 zip codes in South Scottsdale. I look at every house that hits the market. I pay attention to every price drop. I look at what homes are selling for compared to list price. I am mindful of the quality of finishes put into the homes that are selling vs finishes in the homes that are sitting on the market. I'm driving up and down these neighborhoods almost daily to pick out the good streets and the bad streets.

Tracking all of this has helped me to be laser focused when it comes to writing offers on properties and estimating ARV, regardless of market condition.