Success in house flipping depends in large part on finding the right house. While there are tons of distressed properties out there, the trick lies in finding the right one – one that will yield a worthwhile return on the investment after all the rehabbing has been done. So how do you find the right house to flip? The best way is by locating a host of possibilities and then sifting through and carefully evaluating them to find the handful that meets your criteria.
Online Lists
Using any of the multitudes of lists available online is a great way to find distressed properties, foreclosures, and short sales and then find the right house to flip. Various lists use different sorting criteria such as by city or zip code. Many of these lists are free, and they would be a good starting point in your search for the right house. Some of these lists are geared particularly toward investors and house-flippers – BankForeclosedListings.com, ClassicProperties.com, and BankForeclosureSale.com, for example.
Foreclosure Sale Lists
If you have the necessary cash on hand (or access to it) a sheriff’s foreclosure sale can be a good way to find the right house to flip. Counties publish foreclosure sale lists several weeks prior to the sale, and that gives you time to come up the cash that will allow you to bid if there’s a suitable property.
If you see a property in the sheriff’s sale that looks like the right house to fix and flip, you will, typically, have to put up 10% of the purchase price at the sale (cash or certified funds). Then, you have 30 days to settle, but if you don’t, you lose the 10% deposit.
There are a few drawbacks, though. You can view these properties from the street, but you can’t go inside to inspect them. And this, of course, presents some risk because you can’t really be sure about the property’s condition. Still, these properties often present some good profit potential.
Wholesalers
Another viable avenue for finding the right house to flip is going through a wholesaler. In their business model, wholesalers find likely rehab properties, put them under contract, and then find immediate buyers. These buyers than basically perform under the original contract in place of the wholesaler and then pay the wholesaler a fee for serving as a middle man.
This isn’t always the most cost-efficient way to find the right house to flip, but it saves time and can save money in the long haul. Many wholesalers do nothing but search properties that work well in flipping, and they are well connected with agents and sellers who specialize in this area. That’s why going through a wholesaler can be a good way to find the right house to flip especially if you don’t have the time to do all the searching.
Agent Specializing in REO
Real estate owned (REO) refers to property held by a lender as the result of a defaulted loan. In many instances, these properties have gone through the long and complex foreclosure process and often the eviction process as well. Very often, the people who last lived in them likely performed little to no maintenance during the time of the mortgage default, foreclosure, and eviction. This means, then, that such properties, owing to their neglected condition, often sell significantly below what would have been their market value. And this is very good for someone who wants to find the right house to flip.
Many lenders who hold REO property work closely with agents who specialize in these properties. So to find the right house to flip, it’s a good idea to work with one of these agents who have the inside track on such low-priced, rehab-suitable properties. Look for an REO agent in your area to find the right house to flip in your city.
Learn more about how to find the right house to flip in Broward County! Contact me today for more information! 303-565-6348
