Exactly what tools do people use to buy cheap/distressed homes to renovate/flip?

Question

I've been interested in renovating/flipping homes for a while, but I don't really understand how people are finding these hot buys. I check various real estate sites routinely but nothing ever seems to jump out to me, and if a deal is look-warm, it seems to sell.

I'm in the Minnesota area, ideally around Rochester, but perhaps Minneapolis. Any advice?

Thanks

I'm in the Minnesota area, ideally around Rochester, but perhaps Minneapolis. Any advice?

Thanks

Elizabeth Colegrove · Answer

I find mine all off the mls through my amazing realtor. For me the key to my plan is having a great realtor. I can tell you that there is a "huge" difference. I have an okay realtor in charleston and a fantastic one in central California. The difference are night and day. I actually just lost a fantastic deal bc of my realtor. That's why having an amazing region shop with a great realtor has been fantastic. If we weren't pulling out of Charleston we would be looking for a new one!

Curt Davis · Answer

Many of our best deals are off market listings that bird dogs get under contract and bring to us. You need to be in a position to take them down all cash and close quickly. IF you can do this great, if not you might be waiting for some time.

You should also drive around and call the FSBO sellers when you see their signs.

Good luck

You should also drive around and call the FSBO sellers when you see their signs.

Good luck

Alan Salazar · Answer

so e.g someone finds a good deal, what method are you guys using to buy the deal? Investor, if so how do you find people who are interested in buying? or own money?

John Fitzurka · Answer

Try:

realtor dot com

craigslist dot org

and drive around looking for empty properties and look up the owner info (how i get the best deals)

Troy Sheets · Answer

Wow is right @John Thedford , a $30k EMD check will get some attention. I've putzed around on craigslist but it's swamped with junk/spam, I'll have to look a bit harder, thanks!

John Thedford · Answer

Craigslist is sporadic but you can land a bargain. There are lots of advertisers stating "we buy houses". This is a numbers game. The more ads, business cards, flyers, etc you put out will increase your chances of success. I advertise that I buy houses, that I list houses, and that I also do some HML. The last deal I bought came to me from a CL ad. They were seeking a HML which I was not willing to do but offered to purchase the property in the alternative. I wrote a contract and left it with them. They took a few days and eventually called and said they would take my offer. I purchased the property and rehabbed it and was all in for about 70% ARV. They were a distressed owner on the verge of a tax dead sale. They had no car, a job producing no real income, and were in the divorce process. FYI, I do buy and hold rentals and this particular property yields better than 10% COC which is pretty hard to find in this market. Due to demographics I believe our market in SW Florida will show steady appreciation of at least 4-5% and more likely higher than that. I have considered selling off one or two properties that are not near and dear to my but the problem is replacing them. BTW, IMO the only way to do this in my situation is a 1031. I did see a couple potential deals in the MLS yesterday. I am going to look at them in a day or two and possibly put in an offer. One last note: I believe in making a WOW statement with my offers. By this, I don't mean price. I will give an earnest money check of 30K, 40K...something that shows I am a serious buyer along with a current bank statement showing I have the ability to close. So, I try and come across as a SERIOUS buyer. I will ask for a short inspection period, and offer to close fast. I feel that approaching sellers in this manner will persuade them to make a deal rather than ending up with a potential buyer who may not have funds or not have the ability to get financing. As in many businesses, perception can play a role in their decision to deal with you or find another buyer.

Troy Sheets · Answer

John, how are you using Craigslist? Reaching out to FSBO's or??? Love to know, thanks!

Kevin DeVore · Answer

David, do you/would you find it difficult to manage properties from a distance (i.e., living in twin cities and owning in Rochester)?

John Thedford · Answer

You never know when a bargain will present itself. Have as much cash in hand as possible and be ready to move on the deal. In SW Florida deals are few and far between. Great deals don't hit the MLS. Put your name out. Place business cards out when possible. I also like Craigslist and have purchased 3 houses from it. The more time you spend marketing the greater your odds of success. Keep fishing and sooner or later you will get a bite and land a big one:)

Exactly what tools do people use to buy cheap/distressed homes to renovate/flip?

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