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Updated over 6 years ago, 03/21/2018

User Stats

912
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107
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Patrick Philip
  • Florida
107
Votes |
912
Posts

Preparing for a recession

Patrick Philip
  • Florida
Posted

Warren Buffett recently told his shareholders that they should expect stock in his company to lose 50% of it's value sometime in the near future. In other words, expect a recession.

How does this affect the flipping business? More foreclosures, less buyers, lower home prices, more inventory of distressed/foreclosed homes. I am not sure if that is a good or a bad thing for a flipper. More inventory sounds good, but I honestly have enough inventory now. Lower ARV also means lower discounted price, so that might be neutral. Of course, common sense would tell you that a recession is bad for any business. Perhaps longer expected days on market due to less buyers?

Another question, why do foreclosed homes make good flips? Just because something was foreclosed doesn't mean it is distressed. I could understand why a short sale would make a good flip because the price is discounted, but regular foreclosures?

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