How to find the right property at the right price:
5 ways to secure the house for your next flip
When you’ve identified prime neighborhoods for a flip job, there are a few ways to secure the house and begin your intake.
Creative ways to identify your deal sources
Once you’re in the industry, you’ll quickly become connected with others involved in auctions, real estate, and banking. Through these sources, you will see what works best for you and each market.
- The most traditional way to go, MLS stands for Multiple Listing Service. This is an easy place to get all the statistics you need on a property.
- Being a comprehensive list of all properties for sale in a geographic area, this makes searching easy for you as well as your competitors.
- There are thousands of listings on the site, and they move quickly. You’ll need to keep a close eye on the options and be decisive when you’re ready to purchase.
- Having done your research about neighborhoods ahead of time (link to the last post) will help you feel informed for each prospect.
- On the MLS you can look at all the specs and stats, which will help prepare you for the amount of renovation work to expect.
- Important to note: you need to be a member of your local real estate association to access the MLS. The fees for this will vary around $1,000 per year.
- REO stands for Real Estate Owned. These listings come from foreclosed homes that do not sell at auction, and a bank or lender wants to sell the property quickly.
- Often you’ll get these homes at a substantial discount, but they come with the most renovation work.
- There are a couple of ways to track these homes down: 1) Find lenders that send out a list of the properties and follow newsletters. 2) Call up all your local banks and ask if they’re trying to get rid of any properties. This is where networking can come in handy!
- Most often occupants of these homes were evicted and did little to no maintenance on the property. Be prepared for the amount of work needed to get these homes back on the market and profitable.
- If you enjoy a bit of competition and adrenaline auctions may be your game. Trying to land a discount may land you in a bidding war!
- There are a variety of auction types for you to attend and all of them will have significant discounts on homes. There are sheriff sales, estate sales, or private auctions.
- Finding sales requires research on your part. Estate and private auctions will most likely be advertised online and in print weeks in advance. Pro-tip: despite the prevalent use of technology do not rule out searching printed classified ads. Many of these deals and old-school business models put their advertisements in the local newspaper first! Foreclosure auctions are typically published by the county weeks in advance as well.
- Even if you enjoy the thrill of a bidding war, make sure you’ve set a limit for yourself before going in. It can be easy to get carried away but remember there will always be another property up next.
- More risk for the auction properties: the vast majority of auctioneers require 10% of the purchase price down at the winning of the bid, and you must settle within 30 days. If you cannot make that you lose the deposit, so be sure of your finances and risk-taking willingness!
- A potentially longer process but at a guaranteed discount, you may be the type more interested in short sales.
- A short sale happens when a homeowner defaults on their mortgage, and the bank gives them the option to sell the home for less than what is owed on the mortgage. Banks often take this route instead of the costliness of hosting an auction.
- While the homeowner and bank want to sell quickly, the actual closing time may take longer due to various approvals. Ensure you’ve got a bit of patience when working with short sales!
- Armed with research, instinct, and exceptional confrontation abilities, this may be the route for you.
- With a healthy market and high home prices finding a house to flip may be difficult, especially in a competitive market like Southern California! Your best bet for a great deal may be directly approaching the seller before they’ve listed their home.
- You can make an offer on an off-market house by using publicly-curated data and creating a “propensity to sell” model.
- Check out tools and websites like HomeVestors, FindMotivatedSellersNow, PropStream, Rebo Gateway, etc. to explore this option.
Another thing to try out is joining a local real estate investment group! These are the people who will have insider tips about your specific market, and having contacts in the business never hurts.