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THE DEED BRIEF
📊 QUICK POLL (5 sec - no wrong answers)
What’s your #1 hurdle to getting a 2026 deal under contract?
📊 LAST WEEK’S RESULTS
Which strategy are you most likely to run in early 2026?
Buy & Hold (SFR / 2–4): 57%
House Hack / ADU: 29%
Creative Finance: 14%
Small Multifamily (5–20): 0%
⏳ TL;DR
Q: Is flipping still the move—or is this a buy-&-hold market?
A: Flips are losing steam (volume and margins shrinking), while carry costs + longer DOM reward investors who can hold and cash-flow—especially in “refuge markets” with better price-to-rent ratios. Use credits/terms to clean up seller net, but make your go/no-go on conservative cash flow, not list price optics.
WHAT MOST INVESTORS MISS
“Cheaper house” ≠ better flip if days-to-sell and concession rates creep up. Your IRR bleeds in the timeline.
Refuge markets can look boring—but the rent-to-price math often beats trophy ZIPs when vacancy is elevated.
🧲 MARKET CHECK (INVESTOR INTEL)
Rates: 30-yr loans ~6.22% Freddie Mac
Rents/vacancy: National rent roughly -1% MOM; -1.1% YOY; vacancy ~7.2%. Apartment List
Read: Weekly Housing Trends
🧑💻 INVESTOR CORNER
With flips cooling and rents flat to soft, Buy-&-Hold (SFR/2–4) and House Hack/ADU screen best into 2026; select small-multi where cap rates clear your buffer.
Why this tilt now
ATTOM: flip share & profits compressed → thinner spread for risk/effort. ABA Banking Journal
Realtor.com: more supply, slower sells, more price cuts → better basis for holders. Realtor
Apartment List: flat rents + higher vacancy → underwrite Year-1 cautiously, favor properties with resilient rent floors. MTS Insights
ResiClub survey: peers are leaning buy-&-hold into 2026. CNBC
Your 3-step screen (fast):
Pick markets with improving rent-to-price (Realtor.com data + local comps). Realtor
Demand a cash-flow buffer at today’s rate (assume soft rent Year-1, normalize in Year-2). MTS Insights
Structure for staying power: credits for rate-lock/fees, flexible close, inspection-for-info → protect cash and timeline (cleaner net for seller).
🔎 DEAL DECODER
FLIP RISK MATH — 2026 QUICK TEST
IMPORTANT: Read the Home Flipping Report
Flips can still win—only when the spread survives time + carry. Run this before you swing a hammer:
1) True spread (not cosmetic)
Target: (ARV × 0.90) − All-in basis ≥ 10–12% of ARV (≥15% if DOM is rising).
2) DOM shock test (time kills IRR)
Pull median DOM for your comp set. Underwrite +30–45 days.
If profit/IRR dies with +30 days, it’s not a flip—it’s a hold.
3) Hold-cost per day
(Interest + taxes + insurance + utilities + HM fees + staging) ÷ estimated days.
Rule: Daily carry × DOM buffer ≤ 25–30% of projected gross profit.
4) Exit liquidity check
If price-cut share > 25–30% in your sub-market, haircut ARV 2–3% and rerun.
Breaks with a 3% trim? Pass (or convert to BRRR/hold).
5) Rehab slippage
Add 10–15% budget contingency and +2 weeks schedule. Still pencils? Proceed.
6) Financing friction
Include points + extension fees. If one extension nukes ≥20% of profit, basis is too tight.
7) Plan B (insurance policy)
Could you rent at conservative Year-1 and cover PITI for 6–12 months?
If “no,” demand a bigger spread.
🟢 GREEN FLAGS (GO)
Distressed basis (your edge), scoped reno < 8 weeks, sub-market with short DOM & low price-cut share.
🟡 YELLOW FLAGS (ADJUST or PASS)
ARV relies on the very top comps, soft rents (Plan B fails), or profit vanishes with 3% ARV trim / +30 days / +10% rehab.
Bottom line: Don’t avoid flips—de-risk them. If the deal still works after ARV −3%, +30 days, +10% rehab, and full carry math, you’ve earned it. Otherwise, route that lead to buy-and-hold or wholetail.
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⚖️ COMPLIANCE
Education for real estate investors, not financial/legal/tax advice. Investment property taxes and insurance requirements vary significantly by location. Always verify non-homestead rates and landlord insurance requirements before making offers.
Until next time,
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