Real Estate "HACK" Of the Week - August 29 - How to Spot the Ideal Flipping Market

[Wendell De Guzman]

For the more experienced investors, this "hack" of the week is "commonsense" but for the newbies out there, this will be very helpful for you.

You may be enamored by all these flipping shows on TV and you may decide that YOU will go and buy houses to fix in your market. BUT before you do, here's a good question for you to answer: IS YOUR MARKET AN IDEAL FLIPPING MARKET?

What's an ideal flipping market? An ideal flipping market is one where properties sell quickly and property values go up at the same rate or even higher than the inflation rate. Why is that ideal? Because if properties in your market do NOT sell quickly or not at all, it will be difficult for you to flip a house there...no matter how well you rehab a house or make it beautiful. If property values in your area is dropping, it's also going to be difficult for you to rehab a house and sell it. Now, notice I said it's difficult, not impossible...but why do you want difficult?

So how do you know if properties in your area sell quickly? 

Here's the HACK of the week:

Work with a real estate agent and find out the average DOM (days on the market) in a specific part of your market.

If the average DOM is 90 days or less, that's a good flipping market...specially if property values have increased by higher than 5% vs. a year ago. If properties in your market do not sell...then go to a different market to fix-n-flip or have a different exit strategy (like fix-n-rent).