Where to find flips??

Question

Hey everyone!

I have partnered with my uncle who will be providing some private money and we are wanting to flip some houses. He has funded several flips with his brother-in-law over the last couple of years but his brother-in-law is doing some other things now.

I am very ready to begin looking for houses and marketing here in KC, but I just need to know how to determine WHERE! I would like to pick an area or two, a neighborhood, or section of the city that I can really get to know and market to long term. How do I determine where to look/market to for flips??

I really appreciate any counsel or insight!

Thanks,

Taylor

Matt Pritchard · Answer

@Taylor Winn that sounds like a good plan.  You can find a lot of homes in the 64114 Missouri zip in that price range that will sell fairly quickly.  64113 and further North along State Line will be too pricey.  As for Johnson County you can hit that price point in areas of Shawnee, Lenexa, Merriam, Mission and Olathe.  Also up in the Northland and in Lees Summit, but I'm not familiar with those areas.

The most important thing for flipping in the price point you are talking is finding an area that people will actually want to move to. Somewhere with good schools, or near a major office area, etc.

Yeah, I have flipped some recently.  I have one that we are under contract with the seller in that 64114 zip code at a $200k price point (on market for 3 days, multiple offers over list).  Another that we are looking to have ready in February at some point in Shawnee around $170k price point.

Finding the houses really is the hardest part.  The market is saturated with people trying to invest and that has brought out a lot who are trying to wholesale.  If you get on their list, 99% chance they'll keep sending you $25,000 ARV homes in Independence.  And theMLS is insanely overcrowded with people looking to buy a fixer-upper.  They get bid up quickly.

Every now and then there will be a home from a wholesaler that pops up in an area that you can realistically flip, but some of the wholesalers aren't buying at a good enough price point or are taking too big of a spread.  But instead of the market of investors forcing the price down, they are still able to sell them at too high of a price point.  A lot of green investors snatch it up without double checking numbers.

I see a lot of wholesalers list numbers that are minimal repair costs and maximum ARV.  You can't achieve max ARV without a max repair budget.  And if you do minimal repairs, your ARV will be less than top of the market.  The truth is somewhere in the middle of all those numbers.  After the cost of borrowing and listing, I'm seeing $10k spreads on $160k ARV homes billed as "SCREAMING DEALS".

I say all of that, but not to discourage.  Deals are out there.  I have bought 4 renovation projects since the first of July.  1 from my own marketing (buy and hold), 1 from a wholesaler (flip), and 2 from MLS (one flip and one hold).  So every avenue still works.  And now is a good time of year to buy as well.

Nathan Brooks · Answer

@Taylor Winn there are definitely still deals to be had, but just be aware of getting to excited for a property and overpaying.  This is the market cycle that people will continue to do that, and find yourself making little or nothing so just be careful and do your homework!

@Kim Tucker is great, although you should say you STARTED the REIA  group and run it too ... so that's pretty cool.

Taylor Winn · Answer

@Christopher Phillips Thanks so much Christopher! Really great insight.

@Matt Pritchard Hey Matt, thanks! My private money lender is interested in moving his money quickly via flips and his sweetspot range in the past has been around $150,000 ARV. Short term is to just get one house under my belt and really learn. From there, our plan is to flip as many as we can profitably with the way the market is right now. Have you flipped recently? If so, how difficult was it to find the property with the market where it is currently?

@David Scott David, thanks for the input. What are your thoughts on where the market currently is? I know over there in KCK, it can be really difficult to stay profitable and to sell...has your experience been different?

Thanks so much guys!

Christopher Phillips · Answer

Any search site can provide you the ability to see what's on the market and what's currently selling and in what condition. If move in ready is moving quickly, then you know that you can fix a house and get max dollar when you sell it. If remodeled homes are sitting for a long time on the market, you might have a hard time selling your homes quickly. You can determine this based on how many days the properties were on the market before selling. Anything under 6 months is a seller's market, longer than 6 months is a buyer's market. 6 months is about normal.

Another way is to look at home homes are currently on the market vs new versus sold (absorption rate). This will tell you if there is too much inventory on the market.

Another way to look at it, how many distressed homes are on the market (distressed being financially speaking, shortsales and foreclosures). If a town has a lot of distressed properties, you might have a hard time moving fully rehabbed homes. If there aren't many distressed homes, you might have a hard time finding bargain properties needing rehab.

Matt Chanay · Answer

Hi,

Just wanted to see how things were going in the KC area for all of you guys on this thread?

Thanks

Matt

Kim Tucker · Answer

@Nathan Brooks  thanks for the mention - I don't dig too deep into promoting just MAREI as there are a lot of great REIA groups across the country, and the right one to go to will depend on your area - here in KC that would be MAREI and WinVestors

On the MAREI website you will also find that many of the members post their properties.

Kim Tucker · Answer

@Taylor Winn  looking forward to meeting you tuesday at our speed networking!!

Taylor Winn · Answer

@Matt Pritchard Thanks for the info Matt. I'll join some of those lists along with some Facebook groups and keep my eye out!

@Kim Tucker Hi Kim! Thanks so much for the information! I've been attending Winvestors as often as I can the last month or so and I am now looking into MAREI. I am definitely going to be joining some social media groups as well!

Kim Tucker · Answer

I am a wholesaler in KC and we don't wholesale a lot of houses.

We look for a house that can be rehabbed and sold and still make the end investor money.

We have rehabbed a lot of houses and know rehab numbers.

So we look for great deals for our rehabbers, that means we only wholesale a few houses every year.

The rest are rental properties that can be rented as is with minimal work or sold to an end buyer who wants to do their own work.

And in JOCO, those guys are crazy.  I can buy a house and wholesale it to a rehabber or builder and make more  money on the wholesale that I could if I were to rehab it and sell it myself.  They must have plenty of cash and very cheap in house labor paid by the hour rather than the cost of a GC.  So JOCO houses go fast and they go for a lot more than the guru's tell you to pay for a house.To find deals - go to the local REIA group and meet the realtors and wholesalers.  Find the social media groups hosted by the REIAs as the members post properties and set up an email and sign up for every buyer's list you can.  But don't stop there.  Reach out regularly by phone every few months to all your wholesalers and realtors and remind them you are out there and looking for a house.  The really good deals go to the guy that keeps raising his hand and asking for deals.  They get sold long before they get emailed out to the list.

Matt Pritchard · Answer

Hey @Taylor Winn , sorry I didn't see that reply.

Yeah, anything in Johnson County goes very fast.  It's always worth looking.  If it's in Johnson County and the numbers are good, you realistically have 1/2 a day to make a move.  Investors pounce on those!!

I would encourage you to get on some cash buyer lists and join some of the Facebook groups out there.  Like I said, a lot of it is junk in terrible neighborhoods, but occasionally there is a good house in a good area.  No harm in looking anyway.

Where to find flips??

Most Popular Reply