What do you look for when searching houses

Question

When searching online through Zillow or Craigslist ect what homes do you usually look for? For example do you look for run down homes in need of lots rehab  and over look more modern looking homes with little rehab to be done? If both were being sold my motivated sellers which would be better and have more profit.  Thanks for helping.

Neil Goradia · Answer

The answer depends on your strategy... Wholesale, buy and hold, or flip?

If wholesale, you have to keep your end buyer's criteria in mind. If buy and hold and you're handy then look for something you can put sweat equity into. If you're not handy then you'll need to find something that is mostly finished but you will end up paying more. In general, the goal is always to get the best cash on cash return. Keep in mind, the properties in war zones will trick you into thinking you have the highest rate of return because they are so cheap, but you need to factor in vandalism, vacancy, etc. So try to stick with middle of the road areas that will have less turn over.

J.j. McGuigan · Answer

Basically a double close is putting the property under contract the day of the sell to the buyer.  So you are buying the property on that day in order to sell it to your investor, so there is not money on your end involved.  As far as the strategies that go into this I'd be curious to see what more experienced investors have to say as well.

J.j. McGuigan · Answer

I am interested in this thread as well as I am just starting to learn more about wholesaling. I've been reading that the typical earnest fee is around $1000 to $5000, usually tho around $1000.  If you don't have the funds on hand for that the simplest method is to partner with someone who has those funds.  Show them your game plan and make sure it's clear what you're doing.  I think also doing a double close is a way of avoiding having to put down earnest money or showing that you have funds.  If I'm wrong please correct me, as again, I'm just starting out myself.  Best of luck to ya!

Jeff Filali · Answer

I don't use Zillow or Craigslist to search for deals.  The best deals with the best numbers are "Off-Market"

Ronald Starusnak · Answer

Usually when wholesaling we work to get the properties for other fix & flippers. This means we need to consider their profitability. We use the 70% rule. This means, if the house will be worth 100k after the fix & flipper repairs it, they will need to buy the house for 70% of 100k, or $70k. Then they need to subtract their repair costs, so in this hypothetical, if their repair costs will be $10k, they need to subtract the repair costs from the 70% number as well.

This means the person we will be wholesaling for needs to get the property for around 60k to make a good profit. Depending on your market you can use a 15% rule or less. So the fix & flipper wants to pay 60k for the property, you need to figure out how much you want on the wholesale. We won't chase down wholesales under $3k. So that means you need to get the seller under contract for $57,000.

Eric F. · Answer

@J.j. McGuigan

"I think also doing a double close is a way of avoiding having to put down earnest money or showing that you have funds."

If you do a double close you actually have to buy the house and then sell it to your buyer so you darn well better have the money to close (or be able to get it). You are thinking of an assignment but if you do that you still have to put down the earnest money with the original buyer because you are the one signing the contract.

Joel Baptiste · Answer

Hey Guys, Thanks for the information, the answers here are very informative. To add to his question, Which is the best method for wholesaling, Looking for distressed owners, or going after bank owned foreclosed properties, or cruising for cash. I feel like i have all the tools to find these properties but i cant recognize a good deal if i saw one. Also when considering earnest fees and putting the property under contract, Any tips on Proof of Funds? How hard is it really to do this with no money out of pocket. If money is needed, how much on average?

Kristopher Hanks · Answer

@Jacob Ogrady I focus more on Fix and Rent strategy. I look for houses in areas that I know people like to rent in. I find the ones that no one else wants and I offer low. I have no problem getting it fixed up and ready for a new renter. I like to see that the property has been on one of those sites for months. If I see one in a neighborhood I like and it says on Trulia for 180+ days, I will dig further and see if there is a deal to be made.

Jacob Ogrady · Answer

Thanks for the answers I meant to include I'm doing wholesaling

Thomas S. · Answer

It depends entirely on your business plan.

What do you look for when searching houses

Most Popular Reply