So, you are looking for a new way to invest your money, and are considering purchasing a fixer-upper home to flip. Perhaps you even know what type of home you want to buy, and you know what neighborhood your ideal flip would be in. However, finding the right property to flip, that has potential without being a flop, can be difficult for many first time flippers. Where is the best place to begin the search for the perfect property to flip? Here are a few helpful tips on finding investment properties to flip in your area to get you started.
Hire a Real Estate Agent Who Specializes in REO Properties
REO stands for Real Estate Owned and refers to properties that are owned by a lender, typically a bank, or a government agency, as the result of a homeowner defaulting on their loan. Generally, REO homes will have gone through a lengthy foreclosure process, which may even have resulted in the previous owner being evicted when they refused to leave. In these cases, evicted homeowners often neglect their home during the foreclosure process, and may even cause damage to the home when they move out. For this reason, lenders often price these homes at well below their market value. Particularly if the home has been sitting vacant and the lender is looking to sell the property quickly. This can be a perfect opportunity for a flipper looking for a bargain. However, many lenders align themselves with realtors who specialize in selling these REO properties, and thusly, doing the same may be the best way to help you to find one of these bargain fixer-uppers.
Look for Auctions
Auctions can be another good way to find a diamond-in-the-rough property. Estate, foreclosure, and sheriff auction lists are posted online several weeks before the auction is to take place, which allows you to do your research and see if a property up for auction is right for you. However, it is important to keep in mind that with property auctions, there is a risk of getting swept away in a bidding war. While many investors go into an auction with a maximum they would like to spend, some get carried away in the bidding process and end up spending too much. If you attend an auction, it is important to keep a level head and remember your research and your maximum budget.
Scour the Internet
The internet has become one of the most valuable places for flippers to find a property to invest in. There are countless websites and databases out there listing short sales, foreclosures, and other distressed properties. One such website is bankforeclosedlistings.com. Even websites like Craigslist can be a good resource to find hidden gems in your area.
Drive Around the Neighborhood You Want to Buy In
While it may sound surprising in the internet age, many flippers report success finding properties simply by driving around in the area they want to flip a home in. Look for homes that seem neglected or in poor condition, and contact the owner to see if they are considering selling their home. While this may sound unconventional, this has been shown to work, particularly if the right price is offered.
Fixing and flipping a property can be an exciting way to make money, and once you know where to look, it can be easy to find a great property to flip. However, one of the problems that flippers often face is finding a lender to finance the purchase and renovation of a property if they do not have enough capital to flip a property out-of-pocket, as many traditional lenders will not finance these projects. This is where our company can help, as we provide asset-based funding in as little as 24 hours to residential property investors via short-term loans (9 month terms on average). Contact us to learn more about how we can help make your dream of investing in a residential property a reality.
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