If you’re interested in getting involved in fix and flip opportunities, the first step in the process is learning how to find properties. The key is to find properties offered at a low price that don’t require more work than you can handle. The good news is there are several ways you can find the ideal property to fix and flip for a profit when you know where to look.
While you will need cash to make this type of purchase, foreclosure sales are an excellent way to find properties, usually in relatively good condition. Anyone can fall on hard times and fall victim to foreclosures. Be sure to check the foreclosure listings in your local paper often so you can check out properties before the sale hits and you know which ones you want to try to buy. These sales typically require 10 percent of the purchase price as a down payment with the remainder due within 30 days, giving you enough time to secure a loan for the rest.
For Sale by Owner
Many homeowners attempt to save money by selling their homes without the assistance of a realtor. You can often get these homes for less than going through a realtor because homeowners are typically more flexible when they don’t have to deal with realtor fees. They also often want to sell quickly, making them more likely to accept your offer.
Take a Direct Approach
Another option is to drive around areas you’re interested in working in and look for homes that show signs of neglected upkeep. These homeowners may have either moved away or may not have the ability or money to take care of the home properly. Approaching these homeowners directly could result in someone selling to you when they were simply holding on to the property to avoid the hassle of selling it. Homeowner information is often available in property tax records.
When a family member passes away, families often struggle to figure out what to do with a home their loved one left behind. They are also more likely to accept a lower offer simply because they have no need for the home and want to get rid of it quickly so they can split the money between the next of kin. Check local newspapers and other resources to identify properties that have entered probate. This process can take anywhere from a few months to over a year so be mindful of that. Reaching out to the executor of the estate can expedite the process.
Foreclosure isn’t the only reason people lose their homes. Those who fall behind on their property taxes may find their home is sold at a tax auction instead. However, you must register as a bidder prior to these auctions to take part. There are two types of tax auctions. You want to look for tax deed auctions where you buy the property outright versus tax lien auctions that simply make you the homeowners landlord with the potential for foreclosure if payments aren’t made.
A final option is to look for rental properties, especially those that seem to advertise for a long period of time between tenants. Sometimes landlords grow tired of dealing with tenants and would rather sell the home than continue renting it. However, don’t be discouraged if you’re turned down for your offer to buy.