Guidance Needed on Evaluating a Potential Fix & Flip vs. BRRR Opportunity

[Cleiton Levinski]

Hello, fellow investors,

I'm venturing into the realm of real estate investment and am eyeing a property near my neighborhood for a potential Fix & Flip or BRRR opportunity. Though I'm new to this and still learning the ropes, I'm keen on making informed decisions and possibly partnering with an experienced investor who can guide me through the process.

The property that caught my attention is currently listed at $439k on Zillow. It appears distressed and, despite its listing, feels like it has been overlooked. Located in a prime area of Clearwater, FL, the house next to it is valued at $615k, suggesting significant upside potential. With this in mind, I have several questions:

1. 1. Finding Owner and Property Information: What are effective strategies to uncover detailed information about a property and its owner, especially one that's listed but seems neglected? Are there specific databases or resources that are invaluable for this research?
2. 2. Approaching the Owner: Considering the property is listed, would it still be advisable to directly approach the owner? I want to ensure my interest is perceived positively, without harming potential negotiations.
3. 3. Deciding on an Offer: How can I determine a fair offer for a property that, despite being listed, might have a different value in reality due to its condition? What tools or methods should I employ to evaluate its true market value?
4. 4. BRRR vs. Flip Decision: Given the property's price and potential, how can I decide whether to pursue a BRRR strategy or a traditional Flip? Are there specific factors or market conditions in Clearwater, FL, that would make one approach more advantageous than the other?

I'm also considering utilizing $150k-$170k in equity from my primary residence as a HELOC to fund this investment. I'm eager to learn from those more experienced and would appreciate any advice or insight. Partnering with someone knowledgeable in this area, even just for the learning experience, would be incredibly valuable to me.

Thank you in advance for your guidance and support. I look forward to your responses and any advice you can share.

[David Avery]

Clinton,

First off if it's listed,  You could

take the owner to dinner but he has signed a contract with the agent .

The agent gets a commission no matter what you try with the owner. 

Call his agent and go look at  it.

Do not get another agent that represents you.

Now you have about  $12,000 wiggle room ( 3 percent commission).

Don't hesitate to go and look. 

See condition and let BP know condition. 

This is step 1

[Cleiton Levinski]

Quote from @David Avery:

Clinton,

First off if it's listed,  You could

take the owner to dinner but he has signed a contract with the agent .

The agent gets a commission no matter what you try with the owner. 

Call his agent and go look at  it.

Do not get another agent that represents you.

Now you have about  $12,000 wiggle room ( 3 percent commission).

Don't hesitate to go and look. 

See condition and let BP know condition. 

This is step 1

 I think I forgot to mention but it is not listed! :/

[Andy Sabisch]

Your initial post said it was listed on Zillow . . . your second one said it was not listed . . . that makes a difference.  If it is listed with an agent, trying to side step the agent is not going to gain you anything since the seller (owner) has a contract with the agent that gives him a commission on sale regardless of where the buyer comes from.  The agent likely has an idea of what the property is worth so keep that in mind . . . of course there are always gems that agents overlook to get it listed.  If it is listed, how long has it been on the market?  Look at the listing on Zillow and it will show you how much interest there is (views and saves).  That can tell you more about the interest in the  property and what other investors think of it.  If you are comparing it to the house next door - what is the condition of the one you are comparing it to and how long has it been on the market for.  Remember, look at sold not list prices as they are often different especially as markets cool.

If you are considering a BRRRR, what are rents in the area and what neighborhood is it in (A, B, C, etc.)  Use the BP calculators to see what the ROI is and try different scenarios.  You may find one out performs the other by a lot especially with interest rates (and HML rates can kill what might look like a good deal otherwise).

I would be happy to take a look at the specific property you are interested in . . . send me a message with the address rather than posting it here.  Will see what the numbers look like and give you some questions to follow up on.  Don't worry, moved back up north so I am not in the Florida market anymore (and don't do long distance)

[Cleiton Levinski]

Quote from @Andy Sabisch:
Your initial post said it was listed on Zillow . . . your second one said it was not listed . . . that makes a difference.  If it is listed with an agent, trying to side step the agent is not going to gain you anything since the seller (owner) has a contract with the agent that gives him a commission on sale regardless of where the buyer comes from.  The agent likely has an idea of what the property is worth so keep that in mind . . . of course there are always gems that agents overlook to get it listed.  If it is listed, how long has it been on the market?  Look at the listing on Zillow and it will show you how much interest there is (views and saves).  That can tell you more about the interest in the  property and what other investors think of it.  If you are comparing it to the house next door - what is the condition of the one you are comparing it to and how long has it been on the market for.  Remember, look at sold not list prices as they are often different especially as markets cool.

If you are considering a BRRRR, what are rents in the area and what neighborhood is it in (A, B, C, etc.)  Use the BP calculators to see what the ROI is and try different scenarios.  You may find one out performs the other by a lot especially with interest rates (and HML rates can kill what might look like a good deal otherwise).

I would be happy to take a look at the specific property you are interested in . . . send me a message with the address rather than posting it here.  Will see what the numbers look like and give you some questions to follow up on.  Don't worry, moved back up north so I am not in the Florida market anymore (and don't do long distance)

 I'll follow up privately. 

[Shawn Parsh]

Cleiton,

You have been given solid advice so far, but I thought I would add my comments. I understand that a property can be on zillow and not listed by an agent. I currently have a property on zillow under the for sale by owner section. It that is the case I would contact the owner and go see the property. 

Whether to rent the property or flip it is solely based on your long term plan and situation. If you do not have a good CPA with extensive real estate investing experience I would find one and get their advice given your particular situation. Are you looking for monthly passive income or a lump sum? Flipping requires you to continue to do deals to make money while renting provides a steady income. However, you can do both which I also do. You can flip when you need to produce cash to buy properties cash or fund additional rentals. If you still have a mortgage on your own home you could flip until you pay it off. 

To determine the property value I would find a good local realtor that can provide you their estimate on not only current value but also the after repair value. I would also find local contractors and have them give you written bids for the work you would have done if you buy it. With that information you will be in a better position to know the current value and potential profit. 

I always assess a properties value independent of the asking price. People can list properties for whatever they want, including those listed by a realtor, it doesn't mean that it is worth what they are asking. In the end you are an investor and the deal has to make sense or why buy it. 

You also need to decide what the minimum profit you are willing to make to get into the deal. That could be the least cash flow you are willing to accept if you rent it or the profit if you flip it. For example, I would not flip a house if the numbers didn't support  me clearing 50,000 or more. Anyway those are my initial thoughts. Good luck.

 

[Bob Stevens]

This is not a good deal if it was it would be gone in a day Also NO you are not to approach the owner, its listed, PLEASE do not do anything but show it to someone with experience, You are not ready to make an offer. Also are you cash? If not then well you will not get a great deal. 

Finding the owner, and prop info, why? All info is listed 

NO do not approach the owner, what are you doing to say ? 

Deciding on an offer, HOW? YOU need to know this by running the numbers. 
BRR vs flip, ONLY YOU and ONLY YOU need to know the numbers, and all about the area 

You are not ready just yet. Learn 1st , then go on your own PLEASE get to your local RE meeting. Do not even think about this deal, just yet. 

Good luck 

Also I will not touch FL now, prices are coming down just I have said they would. Again this is NOT a deal, it would have been sold 

is this it ? If so I see, 40- 50kish  to make it nice, Baths, kitchen, flooring, paint, 

3052 Braeloch Cir E, Clearwater, FL 33761 | MLS #W7861799 | Zillow