Finding Houses to Flip
Flipping a house is the process of purchasing older homes, renovating them, and then reselling them at a substantial profit. Successful flipping depends on discovering properties that are priced considerably low to allow for a profit when the cost of renovations and the first investment are subtracted from the last sale price. So you’ve understood what the market entails, and you’ve already decided which property type you should invest in and you have secured fix and flip financing. Now you should find the properties that suit what you’re seeking.
Although there are lots of distressed houses available, it can be very hard to find the best home to flip for you. We’ve put together the best tips and techniques you should consider to have a successful house hunting for flipping. Also, check out our post that outlines the best cities to flip houses in 2020.
Here are a few ideas to start on How To Find Houses To Flip-
- Delinquent Mortgage Records
- Divorce Lists
- Probate Lists
- Foreclosure Websites like HudHomestore
- Friends and Family- Get the word out!
- Bandit Signs (We Buy Houses!)
7 Tips to Finding Houses to Flip
Find a Real Estate Agent with a Specialty in Real Estate Owned (REO)
If you aren’t well-familiarised with the area, it’s prudent to include an agent to your flipping team. An agent will know the most favorable locations for flipping homes, which will enable them to filter options that suit you effectively. They’ll also offer additional real estate investment guidance for the purchase of your property, as well as the house flip.
Finding an agent that has a specialty in REO can additionally be an efficient method to find renovated properties for your specific house flip. REO generally implies to a property that is held by a particular lender as a consequence of a defaulted loan. A majority of these homes would have undergone extensive foreclosure, and maybe an eviction process. What’s more, the previous occupants almost certainly did very little to maintain and care for the property during the mortgage default pendency, foreclosure, and eviction. Consequently, most of these properties are priced relatively lower compared to the surrounding homes because of their abandoned conditions, making them ideal for a house flip.
Most loan servicers and lenders align themselves with a team of realtors who have a specialty in selling these kinds of properties. An excellent way to find them for your home flip is to partner with a realtor who has the inside information on these real estate listings, as well as new rehab houses on the market. You can easily find them by carrying out specific internet searches for brokers and REO real estate agents within a certain geographical area.
Be a Member of Real Estate Investment Groups
Many places have local investment groups that regularly meet to provide networking and educational opportunities that might be useful when searching for a home to flip. What’s more, real estate listings mostly appear on the websites, as well as monthly newsletters of these investment groups.
You can also find a number of online forums that can help you in buying a property. Such sites provide lots of information concerning real estate investment opportunities. Social media platforms such as Facebook and LinkedIn also have a few real estate investment groups. Most of these groups also allow you to have meetups, where you will have the chance to meet one-on-one with other investors and prospect property sellers. It’s well worth being a member of such a group and regularly attending regardless of your level of expertise in real estate investin
Search Lists on the Internet
You can find a huge number of lists on the internet that consist of distressed properties, short sales, and foreclosures. Depending on the specific list, they might be sorted by town, city, or even zip code. With these lists, they could be your great resource when searching for a home to flip. Most of these lists are freely available, and some must be bought. It’s prudent, to begin with, the free listings since you might find what you require.
Especially with these days’ media vehicles, it has become much more convenient to discover listings that would be profitable house flipping projects. Just make sure that if you’re seeking for homes on your own, you clearly understand what makes the ideal markets for flipping homes. If you search for listings in terms of brokerage, you will stand a chance to view every single listing that brokerage is handling in a particular area. In general, these listings have a comprehensive representation.
Even though the internet search lists can be very useful in your search for an ideal property purchase, they are all just tools. By setting aside some time and using a little bit of ingenuity, you can acquire a lot of the vital real estate information, without the need to pay any fees
Talk to Wholesalers
In general, wholesalers who deal with finding rehab properties, signing them under a contract and later finding an immediate buyer who will implement the house flip. Necessarily, the buyer will take the position of a wholesaler in the contractor; a specific fee is paid to the wholesaler for working as a middleman.
Even though this isn’t the most cost-effective way of making a house flip property purchase, it can actually be very time efficient and might even save you cash in the long haul. A majority of wholesalers treat this as their full-time job and are also well connected in particular neighborhoods, as well as to individual sellers and agents
Drive around the Specific Neighborhood You Want to Purchase In
Most buyers opt to drive around a specific neighborhood to identify potential properties they can purchase for flipping. This is also called “DRIVING FOR DOLLARS” . In general, they choose properties that have a typical construction style depending on the neighborhood; however, they show signs of abandonment and deferred maintenance. Afterward, they go through land records to determine the owners of the property and get in touch with them through telephone or mail with an offer to buy the property. And although the owner may not want to sell it at the moment, they might want to sell it in the future.
Make Sure to Analyze Foreclosure Sale Lists/ Auctions
If you are able to pay cash for a certain investment property, it could be better to purchase a property at a sheriff’s state, private or estate auction. Many foreclosure auction lists are county-published a few weeks before the sales. Generally, private and estate auctions are advertised a few weeks in advance. Once you review these lists, you stand a chance to scope out a property before the actual sale date. However, be advised that even though you can view the house from the street, you might not inspect it or even trespass to have a better look.
Purchasing at an active auction has its share of risks like becoming overly excited with the bidding. During a bidding war, a majority of bidders tend to forget their original analysis of the property being auctioned and bid far more than they initially expected to pay. If you are bidding against other people for a certain property, make sure to initially set your limit and stick to it to avoid such a problem.
Even though there is a huge deal of potential for a substantial profit, purchasing an auction property comes with another risk. A majority of auctioneers, even sheriff’s, will request you to put 10% of the buying price down at the occurrence of a winning bid. What’s more, you will also be asked to settle within a specified period, mostly 30 days, of the auction. In case you fail to pay the remaining cost, you will lose the deposit you placed. For this reason, this method of purchasing is not for the fainthearted, but for those who are ready to take a risk in their particular house flip.
Funding auction purchases can be quite a daunting task. Many lenders will request an appraisal, or probably a walkthrough of that property prior to closing, which is often impossible with auctions. You’ll require to be ready to pay cash, and if need be, finance the property in the future.
Unfortunately, daily newspaper use as a medium to sell houses has significantly diminished. Most local papers still place classified ads for houses in their online versions and print. However, it is not considered the ideal source for finding a home to purchase.
It can be very time-consuming to go through the newspaper. The listings will usually cover extensive geographic areas, with no method of electronically searching for some geographical regions or characteristics. That seems archaic and nearly impossible in this digital age.
Bottom Line on How To Find Houses To Flip
Being smart when investing in a property can be very challenging, and you’ll require to employ a few tactics to find the most suitable one for you. Keep in mind that finding potential houses is just half the battle. You’ll also need to have an idea of how to pick the best home to flip from your wide range of options. When trying to discover a house to flip, putting in some additional effort will be worth it eventually. You might make a lot of offers that get rejected. Ultimately, however, you will be successful in choosing just the right house if you keep at it and remain disciplined.