When the real estate market is cooling, it’s only natural that home ownership profit potential will also decrease. Well here’s a certain strategy called „follow the builder“.

It can be very easy to make a profit is you sell your home when the market is rising rapidly. This can be harder to do when the market slows down. It’s very difficult to make a profit on the sale of your home when prices are falling.

So is there a way to make sure you can make a profit when you sell your home? There is under all but the most negative market conditions.

The Follow The Builder Strategy

There are lots of builders that build numerous houses within 50 miles of each other. The builders can build whole communities or can be among three to five builders who build communities around large employment centers. You should jump at an opportunity like this.

New Community

In a community, builders will sell the first phases cheaper than the later phases. On one hand, they want and need the cash flow to move. On the other hand, it’ll be harder to sell at high prices because the community isn’t completed yet. This can be a great profit opportunity for you.

The idea is to get in on the first phase of the build out. The prices will be low now, so that means you can build equity. When the community is built up, you can sell the home at a higher price and make a profit. So you should take note of the builders‘ projects so you can do this again.

This means you’ll live in each house for a year or so and make profits along the way. The moving is the only downside here.

The Tax Consequences

You should know that there will be tax consequences. Talk with your tax professional about your plans so you’ll be prepared as to what tax consequences you have to pay for.

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