All Forum Posts by: Dalton Foote

Labor cost and Material ( cost and availability).  Took me 2 months to get Cabinets that I ordered which I was suppose to get in three weeks.

Biggest challenges are finding deals and keeping rehab costs under control. As Evan stated, costs for labor (AND materials) have skyrocketed and although I have my own GC company (as well as HVAC), the material costs (and availability) are well out of my control which makes managing the project much more difficult than during pre covid days.

With a recession looming (some say we are already in one) and interest rates on the rise, finding a deal that pencils out is getting even more difficult. This begs the question, is it necessary to fully switch gears and go down a different real estate strategy like buying apartments or self storage or keep trying to find deals to flip? NOt easy to answer and one answer is not right for all - only you can make that call.

@Dalton Foote, for a small-time, part-time flipper, I agree with Marty that finding deals is very challenging.  For me, it is exacerbated by having to pay retail for work, which brings me to challenge number 2.  Labor is growing at an exponential rate.  I finished a rehab in March, and some of my quotes for work today are nearing double what I paid 4 or 5 months ago, which was effectively double what I paid for work at the beginning of COVID.

Clearly, labor costs are rising across the board, but my friends that work at a large enough scale at least have salaried tradesman on their payroll, so it is a little easier to control that cost, versus subbing everything.

For me (and most investors I talk to right now) the biggest issue remains finding profitable deals (either to flip or keep as rentals). I acquire 90% of mine in pre-foreclosure and/or at auction. I also do some text blasting and have experimented with paid SEO. I like to say finding deals is like being a fisherman, you've got to have as many lines in the water as possible.

With a recession looming we may see more available distressed inventory, but then it could become more difficult to sell/lease our properties. It's like I tell my clients, there's never a wrong time to invest in real estate, only a wrong way. Know your numbers, plan for the worst and hope for the best.