Fix and flip in a declining market — should I be discouraging borrowers?

Wanda, this is a really thoughtful question and the fact that you're asking it shows you're the right kind of broker. My view: You have a fiduciary responsibility to your borrowers. If you can see that a deal doesn't have enough margin to absorb a declining market, you should say so — clearly and in writing. That said, it's not your job to make the decision for them. Your job is to: 1. Present the risks clearly (including the market decline) 2. Make sure the numbers work under a pessimistic scenario (10-15% further decline) 3. Document that you had this conversation 4. Let the borrower make the informed decision If they proceed after understanding the risks, you've done your job. If you place a deal without having this conversation, you haven't.

Robert — this framing is exactly what I needed. I've been feeling guilty about placing deals without fully voicing my concerns. Going to start having this conversation explicitly with every flip borrower in my market.

The brokers who had this conversation with their borrowers in 2022 saved a lot of people from bad outcomes. The ones who didn't are dealing with the fallout now.

This is the difference between a broker and an order taker. Be a broker.