Are you looking for insights into how to start real estate investing? Making a profit in the fix-and-flip real estate market is no easy task. It takes grit, determination, and a lot of hard work to find the best properties, negotiate deals, and complete renovations in a timely manner. However, if you're armed with the right knowledge and strategies, it can be done with tremendous financial success!
How can real estate investors find properties that are ideal for a house-flipping strategy? Here's what you need to know when pursuing real estate investing flipping houses.
Identify Your Market (or Markets)
One important thing to remember when flipping houses is that you need to narrow down your market. This means doing some research on the hottest areas for fix-and-flips and focusing your efforts there.
Not every market is ideal for house flippers. You might also find that market fluctuations make some locations good investments for a while, then shifting to a different market keeps your cash flow and income consistent.
If you're not sure how to research a different real estate market from your "home" market, Privy is an excellent resource used by many fix-and-flip investors. Our software lets real estate investors identify their ideal criteria and target markets, then goes to work finding ideal properties that meet their needs.
Look Into Real-Estate-Owned Properties
Another good way to find fix-and-flip real estate investments is to look for real estate-owned (REO) properties. These homes have gone through the foreclosure process, and ownership has reverted to a bank or financial institution.
While some of these homes may require significant work to get them back into shape, many just need cosmetic repairs and updates. This can make them ideal house flipping projects since they're usually available at a discount, and investors won't have to spend too much money on renovations.
Consider Auctions for Real Estate Investing
In addition to the Privy platform, a real estate investor can look into auctions as a source of good investment properties. Since many foreclosed homes are sold at auction, this can be a great way to find bargain deals to maximize revenue later.
However, keep in mind that some foreclosed properties can be bad investments. Even if you plan a complete renovation during the flipping process, a foreclosed home with too many structural issues at auction can require more rehab than your budget allows. Spending too much money to renovate a home (even if you got it for a low price) can leave you with a negative return on investment after the sale.
When considering foreclosed properties or auctioned homes, make sure you have a good home inspector and contractor on your property investing team. They can help you evaluate the condition of the property then weigh the potential rehab costs and how that could impact your ROI.
Should Real Estate Investors Consider Short Sales?
A "short sale" is a real estate transaction where the proceeds from the sale fall short of what's owed on the property. In other words, the seller owes more money to their lender than they can get from selling the home.
While this may not sound like a good deal for investors, there are some advantages to pursuing short sales as real estate investments. For one thing, you can often negotiate a lower purchase price since the seller is motivated to unload the property quickly.
However, as with homes bought at auction, these homes can be in significant states of neglect. Most short sales are "as-is" deals. This means that whatever condition the real estate investment is in at the time of sale is how it will be transferred to the investor. Be sure to weigh the low cost of the investment property vs. your allotted budget to support the profit you need to make it a worthwhile investment.
Of course, there are other drawbacks to consider with short sales as income-producing properties. One is that they can be very time-consuming and complicated transactions. There's also no guarantee that the seller's lender will agree to a short sale, so it's essential to have backup investment properties in mind for your next project.
Get the Privy Advantage to Find the Best Fix-and-Flip Investment Properties
If you're serious about flipping houses and these investment strategies, then you need the Privy Advantage! Our software platform is designed specifically for real estate investors and helps you find the best fix-and-flip opportunities in your target market (or markets).
While having a variety of sources to find your next house-flipping investment can be helpful, Privy helps investors spend less time looking for properties and more time experiencing the benefits of buying, renovating, and reselling properties to build more wealth. No matter your real estate investing strategies—from wholesaling to house flipping or buy-and-hold rental properties—Privy can connect you with the properties, deals, and investor insights for success!
There's no reason to go it alone when so many resources are available to help you succeed. Get started with Privy today and see how easy it is to find the most profitable real estate investments! We look forward to speaking with you soon.
Download “How to Invest In Real Estate: A Guide!” to learn more expert property investing tips!