If you want to invest in real estate, flipping can be one of the most viable ways to do it. There is risk inherent in flipping houses. For example, if you don’t sell the house quickly, you have to maintain it. There are also almost always bumps along the way when you remodel a house to flip it, and the timelines tend to drag on longer than most new investors might think.
One big challenge of flipping occurs before you ever start work on a property, however. You have to find a house to flip. Finding houses that will work to flip is a challenge because you’re competing with so many other investors who want to do the exact same thing.
You have to be able to quickly identify good deals and make a move on them to be successful in flipping. The following are some of the strategies you can start to use to find the best properties.
Work with Wholesalers
Wholesalers are professionals who find properties that need to be rehabbed, and then they put them under contract. At that point, they work to find buyers who will do the flip. The buyer, in these situations, takes over as the wholesaler and they then pay the wholesaler who acted as their middleman.
It’s expensive to go with this option, but it’s going to save you time. When you look at things over the long-term, it may even end up saving you money.
Wholesalers often have connections in very specific neighborhoods, and they’re really a niche that can be an efficient way to identify properties.
Go to Auctions
Foreclosure and estate auctions are a popular way for flippers to find properties, but they’re very competitive. You have to be able to pay cash in many instances. Your county will publish auction lists for foreclosures a few weeks before the sale itself. If you’re interested in private or estate auctions, those are also usually published and advertised a few weeks out from the sale.
These are nerve-wracking because you typically can’t go in the house before you bid. You can just see it from the street.
There are also very often bidding wars, so you may spend a lot more than you expected.
When you buy a property at auction, you’ll usually have to put down 10% of the winning price at the time of the auction and settle within 30 days. Otherwise, you lose your deposit.
Work with a Real Estate Agent
One of the best ways to identify properties that will fit your investment needs is to work with a real estate agent.
The agent can do most of the legwork for you, and the more you build your relationship, the better they’re going to be able to hone in on those properties that are a perfect fit for you.
A real estate agent can scour the MLS, but they also have network contacts so they can identify opportunities before they hit the MLS.
Go Straight to the Seller
If things are very competitive, you do have the option of going straight to potential sellers, but there are no guarantees this is going to work out. If you see a property you’re interested in, you can go to the seller and make an offer, even if it’s not listed.
Real Estate Investment Groups
Finally, something that has become increasingly popular in the past few years is joining a real estate investment group.
Real estate investment groups offer networking opportunities as well as education.
Listings tend to show up on the websites and newsletters these groups have access to.