House flipping has become tremendously popular, especially in the world of reality television. Older houses are now prime real estate when they’re located in good areas. Factor in the post-COVID-19 housing boom and you have the recipe for a truly successful career.
If you’re new to the world of house flipping, you might be wondering how to find houses to flip? We can help you get started with the house flipping process. Read on to learn how to find all of the best houses in your target market!
An Agent Can Help Find Houses to Flip
When you first get started, it can be tough to not only find houses but to find the ones that are prime to make you a decent profit when you flip them. There are a lot of factors to consider when buying property for the purposes of flipping it.
For example, is the home in a popular area? Are houses of that size and layout popular amongst buyers. All of these questions and more can be answered if you add a real estate agent to your team.
An agent has their finger on the pulse of the real estate market, and they often have insider info about houses that haven’t hit the market yet.
Housing auctions are a very popular way to find a house to flip. Houses are put on auction for a number of different reasons, but they’re put there because an auction is the quickest way to sell a house. Sellers who put their houses on auction aren’t necessarily looking for a lot of money, they’re just looking for the right amount of money.
You’ll find a lot of different types of homes for sale at an auction. There are hidden gems like boarded up houses for sale, and houses that are newer builds whose owners have fallen behind on taxes. You might consider purchasing a new house for a bit more money if the house has only minor cosmetic issues.
Consider a Real Estate Investment Group
Real Estate Investment Groups (REIGs) are a relatively new phenomenon. REIGs are a group of investors who pool their money together, along with their time and knowledge of the real estate market, in order to purchase homes to flip and sell. They may also make money in the real estate market by purchasing rental properties or commercial real estate.
A REIG is a relatively passive way to make money on house flipping. If you want to get your hands dirty or have a say in each step in the process, then a REIG might not be your best option.
Short sales are another popular way to find a home to flip. If you are unfamiliar with this term, a short sale is a term used for when a homeowner chooses to sell their house for less than what they owe on their mortgage. Short sales tend to be priced competitively because the homeowner is in a hurry to sell their house.
A wholesaler is a person who is in the business of sourcing and selling properties for the purposes of flipping. Typically, the wholesaler searches for a house flipper to do the rehab work while they’re under contract for the house, but the house goes to the flipper when they close.
Wholesalers aren’t free, of course. Most ask for a fee in order to find good houses for flipping. It’s not as economically efficient, but wholesalers are well-connected and can help make sure you have enough houses to flip as you need.
Foreclosures are an unfortunate reality in our world. People purchases houses anticipating that they’ll be able to afford them, but things like unemployment, divorce, and even the death of a loved one can have a massive impact on their ability to pay. When someone’s home has been foreclosed, it is up to the bank to sell that house to recoup their losses.
Foreclosures are pretty easy to find online. Popular real estate websites like Zillow and FlipScout clearly identify homes that have recently been foreclosed or are in foreclosure. You can search through local newspapers and check for notices of default at your local county recorder’s office.
Real estate-owned properties (REO properties) are pieces of property that are owned by a real estate company, like a bank. These properties are ones that have been put up for auction, but for some reason or another failed to sell.
If you want to check to see if there are any REO properties available for sale in your area, all you need to do is search through the inventory online. Banks like Chase and Bank of America have a listing of inventory on their websites. It might take a little bit of time to filter through everything, but you could find the perfect place!
Price Your Offer Right
You’ve found a property you think will be right for you. Now, how do you decide how much to offer for it?
In the flipping world, you first want to determine the After Repair Value (ARV). This means you look at comparable houses in the neighborhood to see how much you stand to make once the flip is complete. Therefore, your offer price factors in the ARV and the repair costs.
The formula for pricing your home utilizes the 70% rule. Your offer price should be equal to or less than the ARV multiplied by 70% and then reduced by the repair costs on the home.
A Little Legwork Will Find You the Right Home to Flip!
When you first get started in the house flipping world, trying to find houses to flip might feel like an intimidating prospect. Thankfully, there are tons of different sources in which you can find just the right house on which to start your house flipping career. Pair this info with the right offer, and you’ll be set up for success in this business for a long, long time!
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