How to Find a House to Flip | 5 Ways You Might Not Know Of!
I get asked a lot of questions. Like a lot (and guys I love it! Keep them coming!!) about flipping houses, being a landlord and about DIY home improvement projects.
But the number one question I get asked above all else is….
Where do you find a house to flip?
The answer to the question “where do you find a house to flip” could be a 200 page book all on it’s own! So below I’ll go over the top 5 ways we find houses to flip!
I’d also like to mention that all the methods below are also great ways to find fixer uppers for people who want to put some sweat equity into their home as well as long term investment properties!
Realtor and The MLS (Multiple Listing Service)
This is probably everyone’s first thought when it comes to looking for a house to flip. And it’s a great place to start! You can start searching on your own first online because websites like Zillow pull directly from the same database realtor’s use – you just don’t get as much information as a realtor does and there can sometimes be a lag time on updates like price drops or status changes.
Some realtors specialize in flips, fixer uppers and investment properties – so bonus if you can find one of them!
My only caveat to using a realtor and ONLY the MLS system is that everyone does it! So if you do happen to find a realtor with a flipping niche make sure to ask if they are also able to bid on HUD homes… because that’s next!
HUD (Housing of Urban Development)
A HUD home is a 1-4 unit residential home that is owned by the government. More specifically, it means the Federal Housing and Urban Development paid off an FHA (government insured) loan that a homeowner defaulted on. HUD then lists the home for sale publicly to recover the losses on the foreclosure claim. Was that too technical? If you want to know more about HUD homes, check out this post I wrote all about them!
The point is, the Government has a website where they list all the homes they have for sale. This is the website:: https://www.hudhomestore.com/Home/Index.aspx :: and I listed the whole thing out because the website IS NOT www.hud.com – that website will try and make you sign up and pay for the same information you can get from the actual HUD website!
This flip house (which we called “Mansion” but was far from it) and our current fixer upper were both bought on the HUD site and my parents have found many other properties with this method. Since not as many people know about this HUD method, there’s less competition which means a more likely chance of getting a good deal. And not all realtors can bid on HUD homes, so unfortunately, you as the buyer may never know about that steal of a house in your dream flipping neighborhood if you don’t A. Check the site yourself or B. Have a realtor who can bid on HUD homes!
This is one of my favorite ways to find a house to flip. I remember going for long drives with my parents to scout out houses. I actually can’t believe some of the stuff we did didn’t get the cops called on us. Let’s not get crazy here, I’m just talking driving up and down the same road 12 times and maybe the occasional peek in a window or two of a vacant house they were thinking of buying. SHhhHh, that’s our little secret though guys!
Anyway, you’ll find the longer you flip houses the more you’ll start to favor certain neighborhoods. So a great way to find a house to purchase is to simply drive though the neighborhoods you’re thinking of buying in and keeping your eye out for a few key things. Once you spot a few homes that you’d consider making offers on you’d send the owners a letter (or look up the owners in the public records and send them a letter) letting them know about your intentions and see what happens from there!
What to Look For When Neighborhood Canvasing
- Look for houses with bright colored tags on the doors or windows. This usually indicates that the utilities are being shut off – which is a white flag for a house with an owner who might be willing to sell below market.
- In the winter, look for houses that aren’t shoveled out and in the summer look for houses with tall grass and weeds – both show a home with an owner not caring for it properly.
- Look for general disrepair like old roofs and windows or things like cracked driveways and missing/old/mossy siding.
- Keep an eye out for vacant homes! Look for homes that have no decorations, no potted flowers, no window dressings… no nothing – you get the idea.
FSBO (For Sale By Owner)
Buying homes that are for sale by owner can be tricky. I’ve found that the main reason a home owner lists a home themselves is to save the money on realtor fees! However, if the home truly does need a lot of work they’ve most likely already received extremely low ball offers by other investors.
The good thing about FSBO’s is that you can negotiate your offer directly with the homeowner and “state your case” (so to speak) and let them get to know you and understand what will be happening with their home in the future. Be totally upfront “Yes, I will be making a profit on your home but I will also put in a lot of quality, thoughtful, hard work to restore it to it’s former glory.” If they don’t go for it, move on! No harm no foul.
I know, I know… it sounds super scary! Buy a house online?!? Are you crazy? Maybe a little.
We bought this flip house (the very first house Mr. Stone Head and I ever flipped together) from a website called Hubzu. It wasn’t the smoothest process but it all worked out in the end and the bottom line is, yes, I would purchase from another online site again.
In fact, I’ve bid on but never won a home on Auction.com and the process was pretty much the same as the Hubzu website I purchased from before. You’ll have to read all the terms and conditions of the site should you decide to buy a home online because I can’t possibly list them all here and I definitely don’t want to be responsible if something doesn’t work out for you!
Online auctions can be a great place to find a great deal on a house for a hundred reasons! First, people are scared to buy houses online – so right there you have way less competition than traditional home purchasing. Second, it IS possible to see some of the houses on the inside if they’re vacant – but you might need a realtor if you don’t have your RE license. Third, most of the sites allow backup offers which means if the original accepted offer falls through (which, let’s face it, happens more frequently online) they’ll usually accept the back up offer if it’s close to the accepted offer.
The question I get asked most about buying houses online is how the closing process works. It’s probably different for each property, but my closing was done entirely online! It was awesome and incredibly easy.
There you have it!
My Top 5 Ways to Find a House to Flip – Share, Pin & Tweet this article if you found it helpful!
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