You’ve found the perfect New York property. You can get it for a great price, make easy renovations, and flip the home for a nice profit. Suddenly, you are informed that another potential buyer has similar plans, and they’ve already made an offer. A bidding war has begun, and you find yourself under a lot of pressure. Anyone who has been involved in flipping houses in the NY real estate market has encountered a bidding war at one time or another, and there are very few upsides.
Bidding Wars Will Destroy Your Budget
Anyone purchasing NY real estate for house flipping projects starts with a budget. The budget consists of how much you are willing to spend to purchase a property, how much you are willing to put into renovations, listings, and a bit of a cushion for unexpected costs. Bidding wars mean you have to spend more to make that initial purchase, and that capital has to come from somewhere. So if you are determined to “win,” you may have to skimp on renovations, which will ultimately lower your selling price.
There is No “Perfect Property”
There is no such thing as the perfect property. The NY real estate market is filled with properties yearning for renovations which can be extremely lucrative for house flippers. If a bidding war starts, simply scout out another home. A better strategy would be to line up multiple potential NY real estate investments at the same time. You are never under any obligation to buy all of them, and a bidding war will only help to narrow down your choices.
Check Your Pride at the Door
Bidding wars frequently come down to pride and the ability to beat out the other person with money. It makes no sense to ruin your budget and lower your profit margin just to say you spent more than anyone else on a property that still needs rehab work. Do not allow yourself to get emotionally attached to a transaction. The whole point of flipping houses in New York is to sell them, and you’re only sabotaging your own cash flow by engaging in a bidding war. The New York real estate market is favoring sellers, and no one wins in a bidding war except the person selling the house. Move on, find another property, and flip it. Hopefully the buyers of your fix and flip projects will get into bidding wars of their own.
In the New York house flipping business, the only winning move in a bidding war is not to play in the first place.
