Viability of Flipping in Expensive Neighborhoods

[Will Barnard]

This was a question posed to me via PM that I wanted to share for the entire community and welcome feedback and questions from everybody interested in the topic.

"Hi, Will

Thanks for sharing your valuable experience at the forum-- I have been learning a lot from you. I am a newbie in the flipping business and I have a basic question about the viability of this strategy in more expensive neighborhood: I live in the south bay area and the medium price here is somewhere between $500k~$1M depending on the exact area, and the market is very competitive and price appreciation has been a norm on for a while and a lot of areas are already way above the pre-crash highs.

You are in a market that's similar to mine. So I am wondering, how you find deals in your area for flips? How can I know flipping is even a viable strategy in my market?

I would appreciate any advice that helps a newbie to explore this direction. Thank you!"

[Will Barnard]

The only market I would consider not viable for flipping is during a downturn. With that said, highly competitive markets make it more difficult to find acquisitions that make sense. So you must find a niche target, strategy, marketing plan, or even all of the above to succeed. While that is not very specific, it is difficult to do so being that every area, every market, and every investor is so different so there are a million answers.

Direct marketing over the MLS is key, having or building great relationships with top agents and brokers is helpful, and building a strong performance record is also very helpful. Making your offers stronger through limited to no contingencies, all cash, and quick closings help tremendously as does performing on those promises.

Access to capital is another key point you should focus on. Having your own cash combined with that of private lenders and a couple strong hard money lenders in your pocket will increase your chances as well. This is part of the relationship building process.

Having both my relationships, my track record, and my access to capital has allowed me to gain my acquisitions in million dollar plus neighborhoods directly off the MLS. Some of that has to do with systems I have built and some with great timing and even some luck (which I believe a lot of luck is created by hard work and putting yourself out there, ultimately it places you in the right place at the right time!)

I hope I have answered your question and welcome any follow up questions. In fact, your question was so good, I am going to post it in a thread and send you a link where you can post follow up questions and get other feedback besides mine.

Will Barnard