What do YOU look for in flip opportunities?

Question

Hey! There are many factors to consider when evaluating a deal. What are some of the most important indicators you guys look for to determine if the deal works or not? Is it strictly about the numbers or do you weigh external factors more heavily?

Matt Stewart · Answer

Aside from the numbers I look closely at the area and the neighboring properties. I don't buy flips on busy streets, or adjacent to a highway. I don't buy if the property backs up to commercial property/retail. I don't like seeing an apartment complex nearby. I look closely at the neighboring properties. If a neighbor doesn't maintain their property or has trash everywhere that's a red flag for me.

You should look at the property as if you were the end buyer. If you wouldn't want to live there, then your buyers may not want to either.

You should look at the property as if you were the end buyer.  If you wouldn't want to live there, then your buyers may not want to either.

Evan Polaski · Answer

This advice only really works because I am not a full-time flipper, and therefore can be very selective with properties.

Buy something that is either unique already or can be made unique.  Buying a tract house and putting in the basic LVP, white shaker, subway tile, greige walls will blend in with most other listings.  You need to offer something that is marketable and not available widely.

Jaron Walling · Answer

Like @Irie Jeremiah said you have to buy right. The rehab estimate needs to align with the budget. Focus on the big ticket items first (kitchens, baths, open concept opportunities, new roof, etc.) and trickle down from there. There should be margin for error, delays, or surprise expenses. Given the market and higher rates values are pretty locked in; meaning you can't push market and expect to go pending in 2 days. If the market doesn't support your list price can you pivot to a rental? I'd want a backup exit strategy if you get pinch and don't sell the property. That's not always possible but something to consider.

I would set an ROI goal and stick to it. Most investors/flippers have a minimum amount they need to make to invest their time and $$$. If numbers are penciling out to a 17% ROI and your goal is 25%, how can you find/buy/fix the deal to make that happen? Flipping is a full time job so having realistic goals should be taken seriously.

Irie Jeremiah · Answer

run your numbers and be confident about your max allowable offer. you make the money when you buy! if they don't accept/negotiate, on to the next.

Bob Stevens · Answer

Its all about the numbers, end of story, though many will make it more complicated,

Bill J Fay · Answer

After you can determine if the numbers work, you really want to look at:

-Product type. Are there multiple comps with your similar style? Or are you the one funky house on the block?

-Ease of construction. Was it built before 1940? Make sure you have a contractor that has done many projects with similar build. You don't want someone that starts taking down walls and you keep finding new areas to address.

-TIME. After solidifying a budget, stick to your time estimate and hold your contractor to it. Does it need windows that will take months to order? Make sure you know that going into the project. Pay your contractor extra for getting the job done in time.

Kevin Ivey · Answer

Amount of time invested vs profit, if it's easy peasy and makes enough to pay me for the month or 2 why not.  If it's a beast and full rehab it better make my year.

This is all dependent on knowing your #s are solid all of them buy right, rehab right, ARV right

Craig Jones · Answer

I always look for opportunities to add substantial value to a property beyond just fixing what's broken and replacing finishes.  It's helpful to have a creative eye (your own or a partner) to think outside the box about what a property can become.

One example -- 1800 sqft / 3 BR / 2 BA estate sale with a funky 1984 interior.  We turned the living / dining combo into a foyer + 4th BR + 3rd BA, and then opened up the kitchen to a new 600 sqft great room addition on the back.

What do YOU look for in flip opportunities?

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