Is there a market for flippers in NOVA?

Question

I'm getting started in flipping.  I've lived in Northern Virginia my whole life and I know experts say to try and focus in the area you know best.  Well that's Northern Virginia for me but after hours and hours of research I'm just not seeing it as being a profitable area for flips.  I've looked as far south as Fredericksburg and as far west as Winchester.  Some other areas I've thought about are Richmond and the tidewater area.  I've thought about possibly going into Baltimore and Prince George's MD but I'd prefer to stay in Va if possible.  Another option might be to develop raw land into housing in certain areas but I really want to cut my teeth in some flips before I go that route.  Any suggestions for markets to look into in Va?

Russell Brazil · Answer

Mostly normal rehabs. There are only a fee guys really doing steady condo conversions. Condo conversions are more lucrative, but have a much longer timeline

Sina S. · Answer

The other question that you have to consider is how do you plan to manage the project? Long distance for a flip without anyone on the ground just sounds like a bad idea.

@Russell Brazil Do you see DC flips mainly as condo conversions or normal rehabs?

Russell Brazil · Answer

PG County and DC are the 2 locations in the metro area where the most flipping occurs.

William Brown · Answer

@Davis Sessums If I may ask, why flipping?

Not saying it is a good or bad choice, but also growing up in NoVa I know it might not be the best choice. Have you tried other strategies and haven't found success?

Tyler Sterns · Answer

It's definitely easier to find flips in PG. Although I've noticed even in PG it's becoming harder to find flips. Seems like investors are starting to go out into Charles, Hartford, Carroll County etc.

Harder to find deals in NOVA but I do see a decent amount in the Woodbridge area.

Levi T. · Answer

If your going to crack the NOVA market, your not going to do is looking online, maybe some auctions, but not in MLS or Loopnet. Boots on the ground and knuckles on doors, and watching attorney foreclosure sites daily, not auction.com.

Natalie Schanne · Answer

@Davis Sessums - Real life example of a local Northern Virginia SFR flip in 2016:

A 5 BR 3 BA, 2400 SF single family house next to mine in Reston, Virginia went into foreclosure. (I had reached out to my neighbor, the owner to buy it, but he didn't respond to multiple messages. Bad life circumstances - divorce, lost job, drugs.) He probably hadn't paid on the mortgage since 2014 or 2015. We both bought our properties in 08/09 as foreclosures for about $250k.

The house was abandoned for at least 12 months. It had a notice on the door that it was CONDEMNED. In September, I called Wells Fargo to inquire and they said they'd sold it on Auction.com in June/July 2016. Public records show it transferred for about $275k. The Flipper LLC got title and possession in late September or early October. In early October, I saw the remodeling crew go in with pallets of flooring, tile, etc.. They were pros. I toured it before and after - it was night and day. By early November, it was on the market for $400k and sold for $395k. It closed/settled by Christmas 2016. Previous comps in the area for the same house model were $415-425k during the summer / for a longer listing period.

I believe there will always be opportunities for value-add flipping by buying as-is properties and REO's off MLS, buying deeds at sheriff's sales, buying off Auction.com & other websites, and buying directly with direct mail campaigns & networking. The question is whether you have skills or know people with skills to complete high quality but inexpensive construction work. If not, I do not believe there is very much of a margin to pay yourself very much as a middle man.

Specifically, I think this flipping team was able to fix up the house for less than $40,000-50,000, but someone without construction skills trying to manage subcontractors may likely have paid $80k or more to update 3 bathrooms, paint the whole house, put in hardwood floors & tile, granite countertops, new cabinets, stainless steel appliances, etc.

Davis Sessums · Answer

Thanks for advice everyone

James A. · Answer

@Davis Sessums I actually met up with a bigger pockets member the other day in Baltimore and his friend is an agent out of Ashburn, Va but very smart guy and very in tune with what is going on in the investment side of VA real estate.  His name is Alex Zare and with Pearson Smith Realty.  Am sure if you reach out to him he would be happy to give you some insight.  He is a very nice guy.