Rental Property Investor · Springfield, MO · Member since 2017 · 10 posts · 3 votes
Any suggestions on what would be the best market to move to for someone looking to buy distressed homes to flip.
A little background on myself. I am 28 years old with a home remodeling background. Over the last 4 years I have supplemented my income by buying and remodeling 8 run down homes and selling them. I do almost all work myself.
The problem I am running into is a lack of homes to buy in my market, which is Springfield, MO. I have been looking for another project for 3 months now with no luck. I have worked with the same realtor for years, he specializes in foreclosures and hasn't been able to find me anything. I have also been attending estate auctions and searching the MLS, but again no luck. I have been wanting to move for awhile already. Seeing as I don't like the cold, I would prefer somewhere with a mild winter, but am open to all places. So really any where is an option. I would be looking to buy properties with a value of 250k or less. Any insight would be greatly appreciated.
Investor · San Marcos, TX · Member since 2015 · 272 posts · 360 votes
9y
Flipping is market cycle dependent. Finding enough inventory to flip is difficult. It is a very hard business to scale. It can often be very inconsistent. There is very few barriers to entry other than capital and even due to HML capital is not really a barrier to entry. Those that will fall hardest fastest in a cycle change will be HML and flippers. It happens every cycle. I cannot tell you how many people I have met that used to flip houses. Essentially your entire business model depends on buying enough real estate that meet very specific requirements in order to produce a job based income.
No barriers to entry
No consistency
Cycle dependent
Difficult to scale
As for your question. If you try and chase a flipping market you will always need to chase a flipping market. You would have to have a very dependable crystal ball. Flippers are starting to struggle because their inventory funnel is shrinking. When they can no longer pay their bills they will be working as greeters at Home Depot and eagerly willing to tell someone like me of their glory days when they used to flip houses.
That may come across as snarky but there is value when someone takes the time to point out the risks.
Wholesaler · Springfield, MO · Member since 2011 · 13 posts · 4 votes
9y
Hi Conor,
I'm a wholesaler here in Springfield and always enjoy meeting new and active investors. I have an inventory of wholesale priced homes that need remodeling that you might be interested in. I also have my license, although I only work with investors and don't do public listings, and most of my deals never make it on the MLS for other realtors to see. I do have a wholesale deals website but am not sure if I can publicize it on here so feel free to look me up or message me.
As for for finding a warmer place, not sure I can help you there, lol, but that's the great thing about real estate, you can do it anywhere!
Rental Property Investor · Springfield, MO · Member since 2017 · 10 posts · 3 votes
9y
Leland Barrow Thanks for the insight, I couldn't agree more with you. These are all real things to consider that have already come to my attention. I never intended to flip house for very long, and would quickly switch over to buy and hold. I just thought the best way to get into this would be to buy a house that would make a good potential flip. Then after I renovate it, keep it to add to my portfolio instead of sell it. This would ensure me good returns for the market since I bought it well below market and instantly built equity through the remodel. I also have the advantage of being able to keep renovation costs low since I am an experienced home remodeler and can do most work myself.
Developer · Hobart, IN · Member since 2014 · 773 posts · 225 votes
9y
@Conor Lowe I'm sure quite a few places meet the criteria that you are looking for. I know in my area we consistently find deals with all in investments of 80K-120K and can net a 30% return for the most part.
Flipper/Rehabber · Springfield, MO · Member since 2014 · 114 posts · 67 votes
9y
Hey @Conor Lowe It is harder to find deals in Springfield right now but they do exist. @Aaron Bruenger is a great source and someone you should reach out to. We also wholesale ourselves along with purchasing rehabs. I sent you a PM. Feel free to reach out if you need anything or would like to network.
Investor · Gilbert, AZ · Member since 2015 · 145 posts · 48 votes
9y
Conor, sounds like you need to work on your marketing. Research here or even Google on how to market for RE deals. Plenty of wholesalers here in Springfield as well. Andrew and Aaron are good contacts (ask me how I know) if you are looking for wholesale properties to flip.
Seek out the local Springfield REIA, it's a very active group and we all try to support one another.
I'll tell you from personal experience that I've benefited tremendously from getting educated and attending seminars with others who have made big things happen in this industry.