How to Find Houses to FlipJan 19, 2024
House flipping is more popular than ever. So far this year, 9% of all home sales were flips. It might have something to do with the prevalence of house-flipping shows like Fixer Upper, or it could simply be that more people are becoming aware of the potential income opportunities.
Flipping houses is one of many real estate investment strategies that can help you earn a profit. But, looking for a house to flip can be challenging. It’s an entirely different process from looking for a home or a long-term investment property.
Houses for flipping are often outdated or worn down and in need of a lot of repairs and renovations. If you’re interested in fixing and flipping houses but unsure about finding a property, I’m here to help.
I’m sharing practical tips to help you find houses that are worth flipping.
How to Find Houses to Flip
Getting started with house flipping isn’t easy, but it can be a fun and satisfying experience for a real estate investor. It’s also a great way to utilize your unique creativity, knowledge, and skills.
Before we get into how to find a house to flip, let’s take a quick look at the house-flipping process.
What Is House Flipping?
House flipping is a real estate investment strategy that involves purchasing a property and then selling it for a profit, ideally all within a short period. In many cases, a house flipper will buy a fixer-upper in a desirable area, make significant improvements with repairs and renovations, and then sell it at a price that matches its new value.
Investors typically follow the 70% rule to minimize the financial risk and maximize the potential profit. According to the 70% rule, an investor shouldn’t spend more than 70% of a property’s after-repair value (ARV) minus the necessary repairs. A property’s ARV is the amount the property can sell for after it’s renovated.
The average gross profit on flipped homes in the U.S. is $56,000. The key to maximizing your profit is getting a great deal on an investment property. But finding a house to flip, especially one listed at your ideal purchase price, can be tricky.
How To Find A House To Flip
You’d be surprised by the number of people selling homes through online marketplaces. But when you think about it, it makes sense for FSBO (for sale by owner) homeowners who are trying to find someone to buy their house.
In most cases, FSBO homeowners who use online marketplaces want to sell their homes quickly, ideally to a cash buyer and usually without involving real estate agents. You’ll probably also come across homes that are marketed this way because the homeowners know that their property won’t pass a house inspection.
As an investor, these are great reasons to use online marketplaces to find houses to flip. But beware of scams. Don’t buy anything without seeing it first and never do a wire transfer. If something seems too good to be true, it probably is.
Real Estate Listing Websites
As you browse these sites, look for houses, look for properties that are selling under market value. These sites will often tell buyers what their property is worth, although it isn’t always accurate. And when sellers list their homes for less than that amount, it’s a good indication that they’re highly motivated to sell.
Multiple Listing Service (MLS)
The Multiple Listing Service (MLS) is a database run by real estate brokers that lists all of the properties that are for sale within a specific area. The listings also include the characteristics and vital statistics of each property.
Unfortunately, the MLS is only available to licensed real estate agents and costs $100 or more per month to use. If you’re not a realtor and want to avoid hiring a real estate agent, you can access this information by working with someone who can, whether as a business partner or as a kind favor.
You can also search for listings by brokerage to see all of the properties they’re handling. These listings usually contain a lot of valuable information for potential investors. The US Department of Housing and Urban Development also lists its available properties on its website.
Many investors have luck doing things the old-fashioned way. Driving around your neighborhood and nearby areas is a great way to find potential houses to flip. FSBO homeowners often just put a sign in front of their house and wait for interested parties to contact them.
What I like about this strategy is that it allows you to see the property beforehand. Plus, many homeowners who go this route are likely hoping for a simple process that doesn’t involve paying for a real estate agent to list and market their home.
Real Estate Professionals
As tempting as it may be to save a few dollars and try to find a house to flip on your own, there are several benefits to hiring a real estate professional to help you. Real estate agents know the best places to look for properties to flip and can provide a wealth of knowledge on getting the most bang for your buck.
You can also enlist the help of other professionals within the industry. The more professionals and business owners you have in your network, the more opportunities you’ll discover.
Targeted advertising is one of the newer ways to find houses to flip. It’s also a common tactic for people wondering how to find land for development. Sites like Google and Facebook (Meta) are great for reaching people who are looking up information on a foreclosed home or what to expect when it comes to short sales with lenders.
To take advantage of this real estate marketing tool, you’ll need a website with a high-quality landing page. Otherwise, no one will see the ads and you won’t get the leads you’re hoping for.
Foreclosures or Seized Properties
Last but certainly not least, property auctions are great opportunities for finding foreclosures and seized properties. In these cases, the banks that own the properties want to offload a home as quickly as possible. As opposed to FSBO homeowners, banks are far less concerned about making a profit.
One thing to be aware of when looking at foreclosures and seized properties is that you won’t always know exactly what you’re walking into. Many foreclosed properties aren’t exactly in great condition. For auctions, you’ll need enough cash to cover the full cost of the property.
For many house flippers, maximizing your income potential starts with finding the right houses to flip.
I would love to help you make the most of your real estate transformation journey! If you’re ready to make money with real estate, whether you’re buying, selling, or investing, I’m here to guide you toward success. Set up a consultation and let’s get started!
In the meantime, head over to the Cure Design Style blog to discover tips and insight on various real estate topics!