Preparing for a recession

[Patrick Philip]

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?

[Greg H.]

For those of us that do this for a living,  I am going to keep on flipping no matter what the state of the economy.  I have been doing this since the early 90s and have weathered a few downturns.  For the most part, i use my own funds so it helps me sleep a little better at night knowing that in the worst case I can hold out or turn it in to a rental

My golden rule of flipping is....."It just ain't personal".  There is no deal...no house that I have to have.  If I cannot buy it at my price then I just move on to the next one.  I cringe when I see posts on BP about the house they just have to have

A profit is a profit.  Not every deal is a home run as even Babe Ruth hit a singles from time to time