As a long-time real estate investor, I’m not crazy about the term “house flipping,” but I get it. It’s part of the vernacular used by many investors, new and seasoned alike, to refer to buying, renovating, and selling houses for profit. Reality television has further popularized the term with a slew of real estate-related shows on several networks. Unfortunately, I think “flipping houses” makes the hard work it takes to succeed as a real estate investor sound a little too easy and a bit too trite. If you’re just starting to build your career in real estate investing, you probably already know how difficult it can be. You’re probably also wondering how to find investment properties to flip–that is, buy, renovate, and sell–to make your job as easy as it looks on TV.
Well, the truth is, nothing is ever as easy as it looks on TV. But, flipping houses is a good business and it can be very rewarding, even fun, if you’ve got a way to find great investment properties that keep you in the investing business long after those house-flipping shows go off the air.
Finding Great Investment Properties to Flip
Finding fixer-upper homes for sale that you can rehab and get back on the market in three to nine months requires a solid lead-generating strategy that works in any season, not just pilot season. Thankfully, in most U.S. cities, you’ve got a few options for finding good leads. Of course, they don’t always turn into great deals, but you’ve got to start somewhere. So, let’s begin.
Using lead lists to contact homeowners directly about their properties is one of the most common avenues real estate investors take when trying to find a deal. These lists are designed to organize leads on distressed homeowners, so they can include information on everything from expired listings to homes in foreclosure. Both real estate agents and online vendors supply the lists to real estate investors for a fee, after which investors may call, mail, or visit a homeowner to encourage them to sell.
Except, the data on lead lists isn’t always up-to-date and the homeowners aren’t always interested in selling to an investor, especially if everyone who’s bought the same list has contacted them too. If you’ve got nothing else, buying lead lists isn’t a bad start. But it could very well be a false start if the leads go nowhere.
Many real estate investors also rely on foreclosure listings for leads on cheap properties. These listings are sometimes on a bank or credit union’s website, but they can often be found through your local Multiple Listing Service (MLS) too. Foreclosed houses tend to be in pretty bad shape since the owners who lost them usually weren’t in a financial position to maintain them either. Or, the homes may fall into disrepair because they’ve been sitting vacant for a while. In either case, a distressed house can mean a big discount for investors if the lender prices the property in line with its condition.
Unfortunately, depending on foreclosures as a way to find a great investment property can take a disappointing turn. The fact is, lenders don’t always price foreclosed properties appropriately for the condition they’re in. So you could end up paying too much for a house that needs a lot of work, which can sabotage your returns and, potentially, your plans to invest again if you get too deep into a money pit.
If you’ve got the time, the patience, and the cash, you can follow the lead of some real estate investors and attend property auctions. Most often, the houses you’ll find at auctions are foreclosed homes, but sometimes they’re properties that have been seized by the sheriff’s office for tax delinquency or that fall into probate after the homeowner’s death. Frequently, auctions are listed on the MLS. But, websites of your local lending institutions, the sheriff’s office, and the county courthouse itself should also have information about upcoming auctions and the properties that are available.
However, competition is fierce for auction properties and the price can get bid up so high that there’s little room for any profit. Also, the deposit is almost always substantial, with the balance typically due in a matter of days. And if you don’t get the chance to get a home inspection before you have to pay up, you might end up paying through the nose.
If you’re just starting a career in real estate investing, or simply trying to up your existing game and get better at finding good leads, these classic strategies can potentially kick things off. But, as you’ve seen, they won’t necessarily get you closer to winning the best deals. A better bet for finding older, smaller, “ugly” houses that you can “flip” for profit is to implement a real estate investor lead generation system that can bring the owners of distressed homes to you.
Getting Good Leads That Turn Into Great Deals
I’ve been investing in real estate long before it was trendy and on TV. But, even back then, I knew there was a better way to find motivated sellers without running myself ragged by chasing the same deals everyone else was after. So, when a friend told me he’d joined the “We Buy Ugly Houses®” team at HomeVestors®, and that the leads were coming to him, I asked where I could sign up. Now that I’ve been an independently owned and operated HomeVestors® franchisee for years, I can say with confidence that it was a game-changing move. And, it’s one that you won’t see on reality TV.
Get real leads on great deals in real time. Contact HomeVestors today to discuss your franchising options and flip your real estate investing strategy on its head.
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