House flipping can be an excellent opportunity to invest in the real estate market and turn a profit relatively quickly, but it’s also full of obstacles. If you’re just starting out, there are so many issues to consider, from possible downturns in the real estate market to whether or not you have the knowledge to transform a house into something buyers are going to want.
The first thing to think about before getting into the specifics, however, is how to find the right house. Investment houses can be difficult to come by, particularly when the market is full of investors and the inventory of available properties is low.
Below are some key tips that can help you find the right house to start your real estate investment career.
Go For Location First
As a real estate investor, you’ll quickly realize that the most important thing to keep in mind when selecting properties is location. If you find a house that needs a lot of work and even has serious problems such as termite damage, but it’s in a great neighborhood that’s hot with buyers, it’s going to be present a good opportunity. You can make a house what you need it to be in terms of upgrades and repairs, but you can’t change its location.
Work with an Experienced Real Estate Agent
If you plan on seriously delving into a career as a real estate investor and flipper, you should probably find a real estate agent you trust to work with. The best option would be someone who specializes in REO, which stands for Real Estate Owned. This means the agent works with properties owned by a lender because of a situation like a foreclosure.
These homes are typically neglected and in very bad condition, but they’re going to be priced well below market value, and that’s the only way you’ll be able to turn a profit. If you’re trying to find these homes on your own, it can be tough, especially since the number of foreclosures has dwindled in recent years, and they’re no longer available on every street.
You Don’t Always Need to Be First To Get a Great Deal
There’s a sentiment among many house flippers that they need to be first to jump on an amazing deal when a house or foreclosure becomes available. There’s a lot of competitiveness in the industry, and people will often scour neighborhoods and online listings trying to be the first to learn about a new opportunity.
The result isn’t always advantageous, however. What can end up happening is a bidding war that drives a price up. You might want to consider a different approach, which is looking for the houses that have been on the market the longest.
With flipping, it’s really not about the house as it is when you buy it. It’s about the deal you get, so keep that in mind and know that sellers who have held onto a home for a long time are going to be much more willing to lower the price.
House flipping is challenging and competitive, but if you find properties in hot neighborhoods, it can also pay off. Tips like the ones above can help you get started as you begin your search for the best opportunities.