June 2, 2025 | 2 Minute Read
When we talk about where the market is heading—how things are shifting and how people are feeling—it really all comes down to the money. Leads are still coming in. Properties are still moving, just not as quickly. Especially on the flip side (dispositions), things are taking slightly longer, and margins are getting slimmer.
Ask yourself two critical questions:
What if it sells for 10% less?
What if it costs 20% more to complete?
These are simple but powerful filters. As costs rise—especially in construction—and sale prices soften, your numbers need to account for those shifts.
You are probably experiencing a mild slowdown in your market—like days on market increasing by two to three weeks, not months.
The message is clear: those who are executing well are continuing to dominate. Other investors have made some adjustments, but overall, most aren’t facing drastic downturns.
Stick to your core. Execute deeply. Explore opportunities, yes—but don’t stretch yourself thin when the road ahead is uncertain.
I want to touch on three factors that really drive our current environment:
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Purchase price
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Interest rates
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Construction costs (materials and labor)
Of those, the only one we really control is what we pay for the property. So, now more than ever, we need to buy as deep as possible. There are headwinds across the board—especially with softening sales prices in places like Texas and Florida—and need to be conservative with your underwriting.
Many of the best investors are increasing their contingency budgets to account for rising costs. Tariffs may still hit harder, and labor challenges are already beginning to show in parts of the country. In California, for example, I’ve heard of days where agricultural fields are empty due to immigration enforcement.
These scenarios may not be widespread yet, but you don’t want to get caught assuming yesterday’s numbers still apply today.
Days on market are definitely going up. And interestingly, we are shifting away from high-end flips and instead focusing on:
- Lower ARV properties
- More affordable housing
- Light rehabs
- Quicker flips with faster velocity
We are staying in the most liquid part of the market to recycle our capital faster.
- Execution wins: The best operators are still thriving by staying sharp on underwriting and execution.
- Adapt and prepare: Slight headwinds may turn into storms. Start reinforcing your business structure now.
- Opportunities exist: With tighter money and slower sales, motivated sellers are increasing. Deep deals do exist.
So overall, I’d say: sharpen your numbers, buy right, increase contingencies, and don’t assume what worked last year will work the same way now.