At the height of the foreclosure market, there were many good deals available. Finding these could be as easy as reaching out to foreclosed homeowners or dealing directly with lenders on distressed properties. You could even get good deals off the MLS and through short sales. The reality is that most of these deals were fairly easy to get, close and generate profit. While deals may not be as prevalent as 2009, there are still profitable deals available. Instead of having deals fall in your lap, you will need to work them, and in some cases work tighter on every property. The fact remains: flipping deals are everywhere if you know how to find them. Fortunately, we are here to tell you how to find them.
Given the new flipping environment, it is important to maximize every deal you are presented with. Maximizing doesn’t mean spending the most money, but knowing which deals you need to work tight on and which will be home runs. On the deals that you need to work tight, you should think about gaining new contacts and building relationships. This doesn’t mean that you should do a flip where there is only minimal profit, but you should keep your expectations in line with the market. The deals and profits you may have made five years ago might not be the same in today’s market. There will hopefully be some home runs throughout the year, but there will also be quite a few singles. Instead of passing over the singles and only waiting for more profitable deals, you may need to get your hands dirty, take what you can get, build a new relationship and move onto the next deal.
Foreclosures are not the only way to obtain profitable properties. There are many ways to attract distressed homeowners from divorce, probate, out of town property owners and more. Foreclosure and potential short sales are the most popular ways to find deals, but they are far from the only ones. If your investing area is tight on foreclosure deals, you should focus on these other options and market where people aren’t. Every foreclosure is probably receiving at least a handful of letters every day from realtors and fellow investors looking to list or buy their property. A foreclosure isn’t the only type of seller that can provide a property in which you can flip.
Just because the spread may not be as high as it was on foreclosures, doesn’t mean you should ignore them. There is a large segment of investors who got into the market a few years ago when foreclosures peaked and are now looking for something else since the market has cooled. You need to know which way is best to find deals in your given market. In some markets, foreclosures are still quite strong and still a prevalent source of business. In other markets, there are alternative ways to find distressed properties and flip deals. There are many national numbers and trends that may not be applicable in your market and how you invest. Don’t ignore foreclosures and short sales because you heard that inventory is down or because a friend of yours may have had a bad experience. Know everything about your current market and then decide which ways in finding deals will work best for you.
If flipping were easy, everyone would do it. There will always be investors who parachute into the business when things are going good, but jump out when times get rough. If your market is tight, you need to find ways to outwork everyone for your deals. This could mean implementing a new marketing strategy or ramping up your networking. You should also have an efficient flipping team in place before you get any deal. If you have to work tight on deals, you need to maximize every dollar to get the greatest return. This doesn’t mean being cheap with your contractor or your materials, but knowing where your money is best spent and getting in and out of the property quickly.
Flipping real estate starts with how and where you acquire your properties. There are still plenty of good flip deals out there, whether you find them through foreclosure or not. You may have to change where you find deals and how you work them, but finding a good flip is still possible in any market.