Resouces to find investment properties?

Question

What resouces do you all use to find an ideal investment property in the regards to flipping residentially?

Mark Creason · Answer

Tim,

Zillow uses a statistical formula for coming up with a value.  They also have a disclaimer that it may not be very accurate.  I have done over 10,000 BPOs over the last four years.  A BPO is a Broker's Price Opinion that is usually ordered by a bank when they own the property or the borrower is looking to short sale the property.  I always love when a bank rep calls up to say, you came in at a value of X, but Zillow says it should be 3X.  When you do a search for properties, no comparables support the value that Zillow states.  In one particular case, the market had two tiers, one was between 10-40k for crappy properties needing rehab and a second tier showing properties from 125-175k after they had been renovated.  Zillow gave a range of 75-90k where there were absolutely 0 properties in that range.

In the 1990s, when I was buying and flipping, before it was cool, I would want to know what the market was for purchase and the sale.  In the above example, I would look for a nicer fixer upper in the 20-30 range with the intention to put 50k into it and flip it in the 125-150k range.  One key to flipping is moving the property quickly, as interest costs can eat up your property.  I did over 400 properties in the 1990s and early 2000s in the Chicago, Denver, and Southern California markets.  I believe I lost money on 4 deals in that time.  The key was to buy right and know the market.

Mark

Larry Smet · Answer

Hi @Tim Key

I'll second the recommendation to find a good realtor.  We've found all our flips through realtors (however, some of those were through my broker's contacts who were wholesalers).

You can also get leads from others on your team as well (inspector, attorney, contractors) because they're always around real estate and good ones keep a look out for deals.

Don't forget having a good general contractor on your team.  If you have a handle on the ARV (from your broker's comps or CMA) and you conservatively estimate your holding costs (always assume it's going to take a little longer that you think!) - then the only other factor you need is to accurately estimate the rehab costs.... and throw a contingency in there, just for good measure.  ;)

I'd recommend you also read J Scott's books on flipping and estimating rehab costs.  Both books are excellent.

Happy flipping,

Larry

Dustin Rose · Answer

Tim,

Sounds exciting that you're getting into investing. Great posts above and great advice- which it seems you will always get on this site.

Zillow is a decent starting point- just verify with a realtor that you learn to trust. I can recommend a couple of good ones if you want to connect.

Investors can gain access to the mls ( a limited version) just contact the Sac mls and talk to them about it.

Best of luck

Michael Ran · Answer

@Tim Key  I have had a few bad apples but for the most part they are good. If you are looking in the Houston area I have a few good realtors for you.

Tim Key · Answer

@Mark Creason  thanks! Sounds like you have some solid experience in different areas of real estate. I've heard about selling a flip property as soon as you can. I see a lot of pops lw have a 30 day goal to avoid holding costs but I've heard more average for 3-6 mo from buying rehabbing and closing before the property moves. What would you say is an ideal time farm from purchase to sell with a flip property and what is too long?

Tim Key · Answer

@michael ran thanks for the reply! I checked out your profile very encouraging. In your experience have you ever had a realtor give you a short end of the stick maybe by not being truthful about the property stats just to sell ect or normally are realtors straight forward bc they create win win situations of them selling making a commission and you buying making an investment ect?

Michael Ran · Answer

@Tim Key zillow has a bad rep for over valuing things so double check everything with your realtor before buying. I'm in REI buy/holds for the most part. But flips are a different beast so I'm evaluating my options and flipping is just one of them.

Tim Key · Answer

I've been using the famous Zillow app. I love the estimate feature it has along side it's price history go what it's been sold for or listed for previously. Also it will show you near by recently sold for as well as neighbor houses estimates as well. Michael are you just getting educated or gunna step into the housing market?

Michael Ran · Answer

I am also looking into flips. I just have not jumped in yet. But a few resources I can give to find properties are:

MLS - har.com for Houston area

Auction websites

Wholesalers - there are ton out there but they seem to take most of the profits unless you are doing the 500k deals or sell riskier deals

Court house steps auctions - tax auction, etc.

Realtors - Get a lot of realtors to just hunt for you or call you when they have must sells.

Green sheets - I have not looked but I think they do both rental and sales listing.

These are the same resources I use to buy my rentals. I would love to hear if there are others that are not listed above.

Resouces to find investment properties?

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