If you’re looking for an advantage as a fix & flipper, start by considering upping your game during November and December.
You’re probably reading this and thinking, “are you sure about that?” Everyone knows the real estate “hot time” is during the literal hotter months. But, I’m going to show you that real estate investing doesn’t follow the same rules. If you’re looking for an advantage as a fix & flipper, consider upping your game during November and December. Here are seven reasons why.
1. Off-Season House Prices are Heavily Discounted
While most people understand the best time to sell is during the summer, many homeowners just don’t have a choice. Maybe they urgently need to downsize. Or the owner got an out-of-state job. When the off-season rolls around, prices go down.
Whatever the situation, many moves can’t be helped, and properties historically tend to be at their lowest prices during this time of year.
2. Your Rehab Projects Will Finish During the Peak Selling Season
This is where statistics come into play. The average time it takes to sell a fix & flip is six months from the closing date. So if it takes you an average of six months (remember that it’s only an average!), then it stands to reason you’d want that six months to end right in the middle of the “hot” time of year to sell, right? Investing in fix & flips during the peak of off-season gives you the advantage of not only time but more than enough time to get your investment property into sellable shape.
3. There’s Less Competition for Invest Property Deals in December
There will always be fewer people working around the holidays, that’s just a fact. Most of your competition is relaxing and not paying attention to the market, so if you’re clawing to get your first flip or two, this might be the best time of year to do so without worrying about more experienced competition getting to the deal before you. When you’re serious about running a successful fix & flip business, you know there is no off-season for deals. Let everyone else get into a bidding war in May while you’re closing on properties in December for pennies on the dollar.
4. The Best Off-Market Deals Don’t Care What Time of Year It Is
This might be the most crucial point of all, but you have to understand something first.
I DO NOT find deals on the MLS, except for very rare occasions. The deals that I find happen by targeting a specific group of people who qualify for certain parameters, then I market to them. They haven’t put their deals on the MLS, but the owner is already thinking about potentially moving on from the property yet. So virtually all of my deals are off-market deals, and the beauty of those is that you can find them regardless of the time of year.
The idea with fix & flips, in general, is finding people going through a transition:
- A father’s death leads to kids inheriting an unwanted home.
- An elderly lady moves into a retirement home and doesn’t need her house anymore.
- An owner finds that his rental has been trashed and is sick of dealing with it.
- The owner loses his job and can’t pay his mortgage.
Those types of events don’t wait until the “peak season” in July – they happen when they happen.
5. You’ll Have More Access to Service Pros
When your investment property needs to get out on the market before Autumn, you know that every day counts. Spring and Summer are the busiest seasons for inspections and home improvement jobs, so it stands to reason that service pros are in high demand during those months. However, there’s not much for them to do during the winter months besides emergency calls since everyone is typically waiting for the warmer weather to start working on their homes. Imagine the number of pros you could have at your disposal who want to work but aren’t getting calls during December and January. Since they’re also not in high demand, you might even be able to get them for a lower price, too. Suddenly, you no longer have to worry about fitting your fix & flip around their availability; you’re the one who controls the timelines now.
6. You’ll Have More Time to Get Things Done
One of the biggest challenges when fixing & flipping is that you have to juggle many different tasks at once. It can be hard to get everything done in the time frame you want to prepare the property, meet with contractors, market it, and handle any repairs that might need to be made. However, there are typically fewer people around during December and January, which means you can focus on one task at a time without feeling overwhelmed. Plus, if something does come up beyond your control, you know that there will still be plenty of other days left in the month for you to get things done.
7. Your Material Costs Might Be Cheaper (or At Least Easier to Get)
Material prices fluctuate wildly, especially now with the supply chain issues. However, basic rules of supply and demand still follow: When demand is high, and supply is low, prices are increased to lower the demand. When demand is low for building materials, like in December, the supply levels rise, and prices decrease to move the inventory. You also benefit from buying materials at the end of the calendar year when many companies need to get rid of their stock before the next tax year rolls around.
Even if your material costs don’t decrease much, chances are you’ll still have an easier time getting ahold of the things you need to flip the house by June/July since so few people are doing repairs during that time.
The bottom line: If you’re waiting for the New Year to jump (back) into fix & flips, you may have already missed your opportune window to get started. Next time, plan your buying schedule for the end of the year instead.