Watch the housing numbers
When flipping a house, you are betting that conditions will stay the same or improve over the next few months. Unfortunately, near the end of the bubble, many flippers got caught with more properties than they could sell because they didn't recognize the market was changing under their feet.
"They got caught buying into a collapsing market," Ailion says. "They kept picking up properties because they mistakenly thought that the upward trends would continue forever."
One way to protect yourself, or at least keep your eyes open, is to make a serious effort to track some key numbers. Thankfully, Ailion says, you don't have to be an economist to get value out of watching the trends.
"It's important to watch both local and national data," Ailion says. "National employment trends, interest rate trends, consumer sentiment and GDP provide direction guidance. But real estate is also local, so you need to follow inventory levels, and price trends, as well as metro and county unemployment trends. It's also good to be aware of major job or business closing announcements."