The first step in successfully flipping a property is finding the perfect property to flip! The real estate market can be tough to navigate; houses sell quickly, other buyers create competition, and with flipping, there is the added complication of ensuring your investment is profitable. Luckily, there are many ways to source fix and flip properties. Depending on your investment situation and strategy, you may find some to be better than others. The most common ways for investors to source properties are:
Working with Wholesalers
Wholesalers buy and sell houses regularly, so they usually have a decent list of properties that are up for grabs. While this option offers massive amounts of convenience, working with a wholesaler can cut into your returns quickly. Because they are in the business to make a profit, wholesale markups can be high. If you’re just getting started or need to get more connected in a certain area, wholesalers can be a great resource.
Finding a Dedicated Agent
Whether you have a team that you work with to conduct your projects, or you generally go it alone, working with an agent is very common in this industry. Some agents get early access to the homes that are going on the market, so if you find the right agent to partner with, you could have access to properties that aren’t officially listed yet. Agents are also paid to know the real estate market of a certain area well; if your expertise is on the investment or flipping side of the house, an agent can do some of the heavy lifting on the front end.
Scour Real Estate Auctions
Real estate that is up for auction, either through foreclosure or estate auctions, can be found at a steep discount if you know how to work the system. The biggest issue with auctions is that bidding wars can easily drive the price up, and their competitive nature makes it easy to lose sight of the price limits you had set prior to the auction. Additionally, auctions require cash payments most of the time. If you need to finance your purchase, most lenders require an appraisal of the property, which often isn’t allowed with auctions.
Utilize an Investment Group
Real estate investment groups are great resources for all real estate investors. Even if you don’t need help sourcing properties, consider joining an investment group in your area. They offer education, resources, and a network of people involved in the same industry. That network can be a great place to find deals; for instance, if someone in the group found a great property that they aren’t interested in, they’ll likely pass on the information to the real estate investment group members first.
Directly Contact Owners
This method requires a bit of perseverance, but you’d be surprised at how receptive some homeowners can be to selling their homes to investors directly. If you drive through neighborhoods and see houses that are potential flipping candidates, you can reach out to the owner to see if they’d be willing to sell directly to you. This cuts out any middlemen, making your returns higher than most other options.
Find Your Method
If you talk to other real estate investors, some will say they love working with wholesalers while others will say it’s a waste of time. You have to find what works for you and your business. In reality, you’ll probably use some combination of the above methods, but at the end of the day, no one can decide your direction besides you.
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