4 Expert Tricks for Finding Flip Deals in a Tight Market

4 Expert Tricks for Finding Flip Deals in a Tight Market

4 min read
Nathan Brooks

Nathan Brooks is the co-founder and CEO of Bridge Turnkey Investments, a Kansas City-based company renovating and selling more than 100 turnkey properties per year.

Experience
With more than a decade of experience in real estate investing, Nathan is a seasoned investor with a large personal portfolio and a growing business portfolio. Just last year, through Bridge Turnkey Investments, he helped investors add over $12 million in value to their real estate portfolios and has goals to crush that number in the coming years.

Nathan regularly produces educational content to fuel his passion for helping other people learn about and find success in real estate investing. He has been featured regularly on industry podcasts, such as the Bigger Pockets Podcast (#87, #159, #232, and #319), Active Duty Passive Income podcast, Freedom Real Estate Investing podcast, Fearless Pursuit of Freedom Podcast, Titanium Vault, InvestFourMore Real Estate Podcast, the Best Real Estate Investing Advice Ever show, the Good Success Podcast, FlipNerd, Wholesaling Inc., the Real Estate Investing Profits Master Series, Flipping Junkie Podcast, Flip Empire podcast, Think Realty Radio, and more. He is a sought-after speaker and writer, featured regularly on the BiggerPockets Blog and found on stage regularly at events across the country.

He is also part of multiple leadership groups for top executives, including Collective Genius, an invite-only group known as the Elite Investor’s Board of Directors.

In an effort to help investors further, Nathan started Bridge Real Estate Investing Meetup (BREIM) in 2018. The group’s tremendous growth earned it the title of “Largest Meetup in Kansas City” after only three months running, and it continues to grow daily.

Nathan is a passionate leader, well-respected investor, and friend to everyone he meets. He currently lives in Kansas City on his 11-acre property with his wife and two beautiful children. He loves to enjoy the outdoors, train MMA, and come up with new business ideas to crush.

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Right now in our market here, it’s tough to find deals — for flips especially. We have a lot of people interested in flipping properties, whether they know what they are doing or not. And we also have a hot market, with homes not staying on the market long and buyers willing to pay a premium price for a premium product.

This week we made offers on nearly 10 properties. We’ve gotten several, but I’ve also had several come back with this:

  • Highest and best buyer paid $10k more
  • Highest and best buyer paid $30k more (!!) than we offered

Are these people NUTS!?

I’m all about getting deals and making money. As a matter of fact, the month of May was my best month in real estate, ever. But I am not going to sacrifice a reasonable return and a margin of safety in a deal to try and squeeze a tiny profit margin out of a crappy deal.

Don’t do it.

Now, who is to say those buyers paying $10k more (and $30k more) weren’t doing things totally different than us? Maybe they were doing smaller rehabs. Or not as nice ones. Or not tearing out walls. Or maybe they had their own in-house construction crew and could do their rehabs more cheaply than I can do mine. I liked both of those houses, and dang it — I wanted them both.

So where are places to go during times like these, when the market is so tight, and deals are hard to find?

4 Expert Tricks for Finding Flip Deals in a Tight Market

1. Look into the houses that have been on market for a long time.

Sometimes we look at a property and make an assumption that we can’t buy it because its original listing price is higher than what we would pay. By taking note of properties you would really like or even going ahead and touring them and making your spreadsheet for what you could pay, you’ll develop a list of properties you can continue watching. Sometimes after the initial barrage of showings on a property like this, the property may have more defects than the buyers will willing to pay, so it sits.

flip-hot-market

Related: The Top 5 Ways to NOT Sell Your Next House Flip

2. Keep an open mind.

Right now we have certain areas we love to buy in for flips, but we have begun doing homework in a variety of other areas that are ripe for flips and have more options available to purchase. Just don’t get yourself worked up on deals without really doing homework on the area, understanding what is available, what is selling, their days on market, and sales price to list price.

Once you have an idea of where you might want to buy, make sure you go drive the area. Get a feel for what the neighborhood is like and a good sense of the properties surrounding the potential flip deal. Make sure it is a place that has properties not just for sale, but that are SELLING.

3. Consider other ways you can flip a property.

Along with one of my partners, we are starting to acquire properties that we can pay just a bit more money for, rehab for rental/flip, rent out for several years, and then have multiple exit strategies to get out of the properties in the future. You don’t have short term capital gains this way, and you have the passive income and depreciation on the property.

I am not suggesting you OVERpay for the properties. I am just suggesting you may be able to put yourself in the best position by being willing to rent for 1-3 years on something, and then consider the multiple ways you could exit that asset in a few years.

flipping-tips

4. Ask people.

Seriously. I get a lead off Facebook probably every other week. Why? Because I ask. I’ve bought houses off Craigslist. I ask other agents I know who know of motivated sellers. And I have a trusted group of people around me who know what I am looking for and call me when something comes up. You have to keep asking for deals. Otherwise, someone else will eventually be asking — and they will get the deal instead.

Related: 12 Key Components to Inspect BEFORE Buying a Property to Flip

Go Get Your Next Deal!

Getting real estate deals together, putting a house under contract… that’s easy. Keeping your deal together on budget and in time, and making a solid rate of return — that is when you have to work hard and make sure you are making your money when you first close on that property. Have your game plan in place, and execute. Know what you are willing to pay, and don’t go over. Be willing to pull the trigger, but also be willing to walk away.

Real estate investing is about making money, but it’s also about not losing, too. When you decide to go into a deal with a partner or with others, make sure you aren’t so excited to get a property purchased that you pay too much money and you skimp on holding costs or your cushion. You are just setting yourself up for failure.

Stick to your criteria (beds/baths/location/size, etc.), stick to the ARV and all in percentages or amounts you are looking to make (say, $30k or whatever you are looking to make on your flip deals), and then execute!

Investors: What tricks do you have for finding deals in a tough market?

Leave your comments below!