What due diligence should I do before buying a fix and flip?

[Patrick Philip]

Do I need to search for back taxes? Leins? What type of leins?

[Bryce Wong]

This is a very broad question but here goes: The title company usually handles the search for liens and back taxes. Title insurance is usually included with the closing costs. The other due diligence would be getting quotes from contractors to make sure that you're not overpaying for the rehab. Look up similar comps around the area to see what they are selling for. Also, educating yourself with rehab would be very beneficial and can help save you a lot of money if done correctly. 

[Doron Nissim]

Hi@Patrick Philip

you should check with the city for code violations open or expired permits and municipal liens.

some title companies does not consider those as title defects and wont order it. ask them first before you start doing your research.

also drive around the area, call Realtors signs ask to see these houses , ask questions about the price , days on the market and how much are the owners flexible on the price. that should give you a good idea on the competition and what you will be facing when you come to sell.

don't forget to run the numbers few times and in few situations.. fix and flip, fix and hold, wholesale etc.. might be good idea to show it to another investor ask for their opinion..

Good luck!!

[Mike Hanneman]

Is this an off market deal?

If it's on the MLS get your real estate agent to do alot of that for you. It's free of course to you. That's what they are paid to do, along with the title company.

[Patrick Philip]

@Mike Hanneman I really don't trust real estate agents. Most of them have little to no experience in real estate other than selling houses for other people. I would never trust any of my business to a real estate agent. I have literally been at a strip club and one of the girls told me that she was also a realtor. They wouldn't know what 16/2 wire was if it hit them in the head.

[Mike Hanneman]

I understand your concerns as I have dealt with my fair share of agents that are Flakes. However finding one, a good one is a real estate invester's best friend. Your price for the home, if it's on the MLS reflects, the agent's cut wether you have your own or not. The buyer's agent will just get all the commision verus spliting it with your agent. You should at least have one on your side of the deal. Just my opinion.

As for 16/2, I hope you're not finding that in any of the homes you are looking at unless it's attached to a lamp!!

As for the leins and back taxes, that will be taken care of by the title company. Make sure to get title insurance.

Also I hope you are planning to get an inspection, too! I know you probably know what you need to know, but even as a contractor I still pay the little bit of money for an inspection as it gives me an extra set of eyes.