There is no denying that property flipping is one of the popular real estate investment strategies. It essentially involves purchasing a house with the intent to make a profit. But the logistics involved in the process of flipping may get complicated if you don’t know which property to buy. So how do you find a property to flip?
If you decide to purchase a property in a modern neighborhood, you are typically banking on that neighborhood for increasing the value of the property. Buying a property in a newly built locality means that you want to find buyers with large budgets who want modern and advanced features in their homes.
If everything goes according to the plan, you can make a good profit. However, if anything goes wrong such as timing issues, faulty budgeting, or a spike of criminal activities in the neighborhood, you can get stuck with a property you cannot get rid of.
How quickly or slowly you make profits from flipping depends on the condition of the real estate market. If the market is booming, house flippers have a chance to make a profit in some areas. But if the market is declining, the fixed-up properties can sit in the market for a long time.
This is when you need the right skills and strategies to find the right property to flip. If you are considering house flipping as an investment option, the given tips might help you.
How to Find the Right Property to Flip
Become a Member of Real Estate Investment Groups
There are numerous areas where you can find local investment groups providing people interested in real estate investment networking opportunities.
You can look for local investment groups that can provide you with networking opportunities. They frequently list these real estate opportunities on the websites and in newsletters. That gives group members access to useful investment advice.
Not only this, the groups may have lots of referral networks for flippers to find properties that are fit for flipping. NationalReia.org, for example, is a good place to find plenty of investing groups. It provides a comprehensive list of real estate investing groups in different states.
These groups also offer seminars, educational newsletters, and online questioning sessions to help real estate members understand this business. You should consider joining one such group no matter what your experience level in real estate is. Plus, you will be able to find out new houses or properties to flip on the market.
Team up with a Wholesaler
Teaming up with a wholesaler can be a good idea to find the right property to flip. A wholesaler is a person in real estate business who finds a rehab property, puts it under contract, and then finds a potential buyer for it.
The buyer essentially performs under a contract on behalf of the wholesaler and pays a fee to him for working as the middleman. You might not see it as the most cost-effective option right now, but it will save you a lot of time and money in the long run.
Many wholesalers flip properties as their full-time job. They have connections in different neighborhoods as well as with certain sellers and agents. In general, you can find wholesalers on different real estate investment forums and groups.
Hire Real Estate Agents (REO Specialists)
Real Estate Owned (REO) refers to a property that a lender holds when its owner fails to pay the loan.
These homes or properties often go through a lengthy foreclosure or eviction process if their owners refuse to leave. Most often, the last occupants of the property did no or little property maintenance during their pendency of mortgage default, eviction, and foreclosure period.
This results in the neglected condition of the property and reduces its prices below the market value. But that is a good sign for you.
Many loan servicers and lenders align themselves with a group of real estate agents that specialize in finding and selling distressed properties. You can find these bargain-priced properties by working with these realtors, as they are closely watching new rehab properties and real estate listings on the market. You can easily find these agents by searching “REO” and “REO brokers” on the internet within your specific location. This will help you find the best properties to flip in your area.
Drive through the Neighborhoods to Find the Right Property
Driving around the neighborhoods in which you are looking for a flip property is a good idea to begin your search. Many expert flippers do this to locate potential properties they want to buy.
Generally, house flippers pick a property that has clear signs of deferred maintenance. After that, they search the land records of the property to find its owner and reach out to him/her via mail or phone with a purchase offer. This strategy has a good success rate. Even though many owners are not interested in selling the property, they take it as an opportunity to sell it in the future.
Find Flipping Properties on the Internet
There are plenty of lists on the internet that enumerate short sales, distressed properties, and foreclosures. You can use town, city, or zip code information to narrow your search within these lists.
Although these lists are usually free, some sources sell them to the people who are interested in finding distressed properties. You can begin with the free ones to find the properties that suit your budget the best. With the current media vehicles, finding lists of profitable flips has become quite convenient.
In a nutshell, you need to be smart and vigilant in your property investment plans, especially when you find a property to flip. You might have to employ a multitude of methods to find the property that requires minimum efforts to produce maximum profits.