Fix and Flip Market Analysis

[Bo Johnson]

It's about time I get involved on the forums here! I haven't made my first RE investment yet, but I'm determined to not succumb to paralysis by analysis...

I have been reading J Scott's book on fixing and flipping, and I've been simultaneously developing a business plan. When it comes to market analysis, I know the areas of my city (the nice areas, safer areas, school zonings, expensive areas, etc...), but I get overwhelmed by all the available data when it comes to determining my target "farm area" for properties to rehab. I want to utilize direct mail and bandit signs for deal generation, and I don't feel confident in my ability to specify a good target area to focus on. In an effort to efficiently spend my time and money, here are my questions:

1. Will my time be best spent pursuing real estate agents in various areas and picking their brains on sales trends (# of bedrooms and baths, sales price, exterior and interior finishes, age of buyers, etc...)?

2. How useful is Zillow, trulia, etc. in market analysis? I do not have my RE license (yet!), so I don't have access to the MLS. Are there other sites or resources that are particularly useful when doing market analysis? Which data is especially crucial?

3. Are there any red-flag indicators of markets to definitely stay away from or green-flag indicators of markets to definitely pursue?

4. Any words of wisdom from experienced fix and flippers about identifying opportunity in a market and where to start?

Thanks in advance! J Scott's book, this site, and the podcasts have been extremely helpful and I hope to be able to contribute myself soon!

[Adam Drummond]

@Bo Johnson 

as a realtor myself and a flipper... I think one of the best tools is to find a realtor that you trust and will help you.  I worked with many investors over the years, and the last thing I wanted was for them to come back to me to list a property that I sold them to rehab, and it not make them money.  I took pride in trying to find good deals for my clients.  anyhow, hope that helps some.  also, Zillow is a good starting point, but def do not assume the their "zestimate" is accurate.  im not sure if you're allowed to put websites on here, but here are two that I've bought foreclosures from in the past:  hudhomestore.com     homepath.com 

also.... I never buy a property that doesn't have recent (sales within last 12-18 months) sales to back up what it will be worth when done.  again, a good realtor will help you find the right property.  sorry for the long response.  best of luck!

Adam