Where to Find and Flip Houses [For First Time Investors]
Flipping houses is a very lucrative real estate investment strategy when executed well. However, we all need a bit of a push in the right direction when we’re starting out. That’s where we come in!
Your first step is to narrow down your target geographic market. And, if your budget allows, buying real estate to flip in areas with good amenities such as access to open space and great schools, will make your flip easier as well as draw you bigger profits on your investment.
Once you’ve identified this area, there are several places you may discover your dream fix and flip. Keep reading as we walk you through them step-by-step.
If you’re wondering how to find cheap properties to flip, foreclosed properties are a good place to look to find good deals.
When you buy a foreclosed property, you’re purchasing a house that a bank had repossessed. This is usually because a borrower failed to make mortgage payments. More often than not, these properties need a little love. As a result, you want to ensure that if you purchase a foreclosed property, you factor in the cost of renovation. On top of that, you should target renovations that maximize your ARV.
So, where can you find foreclosed properties? Firstly, there are realtors who specialize in working with foreclosed properties. Also, a simple scroll through a Zillow listing site can provide good - and free - results. You can even check out the Federal Housing Administration (FHA) or Department of Housing and Urban Development websites.
Another option is to search through public records at your local County Recorder’s Office or drive around the neighborhood to look for foreclosed properties. Although a little time-consuming, you may find the perfect property. So keep an open mind!
If you’re based in New Jersey, check out our tips for buying a foreclosed home in NJ.
Auction houses can be a real goldmine for finding homes to flip. This is provided they have enough cash to settle a down payment, or sometimes the full price of the property on the spot, as soon as they secure a winning bid.
Auctions are also a great way to scope out foreclosure properties — sometimes they sell hundreds per day — as they tend to publish property lists several weeks before the auction date. However, make sure you do some background research so that you go in prepared.
When you actually get to the auction house and start bidding, it can be very easy to find yourself caught up in the excitement of the process and start bidding beyond the limits you set yourself beforehand. So beware of catching bidding fever!
Furthermore, be wary of inheriting a property with liens attached to it upon purchasing. That being said, If you’re an experienced investor, you may feel comfortable navigating this. However, if you want to avoid this, have your title insurance secured before you make any auction property purchases.
Check out our guide on how to buy foreclosures at auction and ensure you come out on top in the auction hall.
3. Short Sales
Another great way to find and flip houses is to contact homeowners who may be willing to initiate a short sale on their house. This usually amounts to selling for less than the remaining balance due on their mortgage and at a substantial discount.
Short-sale properties are listed on most real estate websites. However, many brokerages also provide lists of them for investors who might be interested. Alternatively, you can sign up for access to the Multiple Listings Service (MLS) — which is only available to licensed realtors or appraisers — where you’ll also find short-sale properties listed, albeit not always flagged as such.
It’s worth bearing in mind that on these sites, short-sale listings could also appear as “headed for auction,” “notice of default,” or “subject to bank approval.”
4. Estate Sales
Still Googling “how do flippers find houses?” Well, another route for flippers looking to find the perfect fixer-upper is to look for estate sales initiated usually when a property owner passes away.
Details of available estate sale properties can be found on estate sale-specific listing sites. On top of that, you can also look for information on estate sales at your local County Clerk’s office.
5. Direct to Seller
Why not take matters into your own hands? Start approaching homeowners whose properties aren’t listed yet and make them offers directly.
There are several ways of doing this. One is finding a real estate agent who can help you with the process, or networking your way through local real estate meetings to set up useful connections in the field.
Alternatively, you might consider setting up a direct mail campaign to ramp up your marketing efforts and ensure that local homeowners know about you. This will involve some background research to identify areas or specific homeowners that might be willing to sell.
Failing that, you could simply introduce yourself using a door-to-door strategy and ask around among neighbors to see if there are any potential fix and flip options in the area.
As soon as you know where and how to find houses to flip, tracking down real estate deals becomes an easy process.
As time goes on, you’ll also learn what properties work best for your fix and flip strategy, how much you can afford to spend on renovation costs, and ultimately how much risk you are prepared to take on.
Once you’ve found what works for you, it’s simply a matter of repeating and refining your fix and flip strategy over time.
Contact us today if you’re ready to secure funding for your fix and flip investment.