In 2006, the Texas market was flooded with fix and flippers. The housing market was appreciating faster than normal, and many people were looking to sell their old homes than needed repair.
In 2006, focusing on a strategy where you purchased distressed properties at discounted rates, rehabbed them, and resold for profits made a lot of sense. Many flippers thought this market would last forever, never learned additional ways to buy & sell houses, and took bigger risks.
However, Mrs. Grove saw that the market was changing, slowing down and that prices would fall. As such, she adapted from wholesaling & flipping to short sales.
Many of the flippers didn’t adapt. Housing prices dropped. Buyers couldn’t qualify for loans and no one was buying these flips. They were stuck holding onto properties longer than expected and had to sell for much lower prices.
Those who didn’t understand the signals coming from the real estate market and adapt to different strategies lost a lot of money and had to try to find different careers in a horrible job market.