Finding Undervalued Deals in Today’s Market

[David Martoyan]

For those of you actively working on fix-and-flip projects, particularly in dynamic markets like Houston, I’m curious about your approach to navigating today’s challenges. With inventory tightening and competition increasing, what strategies have been most effective for sourcing truly undervalued properties? while still trying to keep up with the competition 

Do you rely more on direct-to-seller marketing, networking with agents, leveraging platforms like PropStream and Batch Leads, or just by looking at a lot of deals? And when it comes to your due diligence, how do you ensure you’re accounting for unpredictable rehab costs or market shifts?

As someone focused on wholesaling and sourcing distressed properties both on-market and off-market I’m always looking to align with investors, agents, and other fix-and-flippers who are actively in the game. I’d love to hear about your recent successes, challenges, and what’s working in your market, especially when it comes to the process of finding good deals, putting them together and making a profit. Let’s share some ideas !

[Peter Mckernan]

Quote from @David Martoyan:

You will always have a high amount of competition for real estate and real estate investors. There are always people entering the market and leaving the market all the while the many investors that do this for a living will stay and grab deals. That does not even include the one or two deals that happen daily or weekly between realtors who know the buyer/seller and make a deal happen as almost an off-market deal. You need to always be changing with the market, testing and poking to see what marketing works better and what does not work at all. 

I have an example from my own experience, radio channel is a great avenue for deals (maybe in your market, I would look into it), and in many markets, it crushes. I tried in my market which is the 2nd biggest to New York, so pricing for ads was really high and the return was not great. I got a couple of deals but lost money on the marketing campaign. I know a lot of people who started running ads on radio in other markets at the same time I did and they are killing it and it is their main marketing source. 

Your second question is in line with what I mentioned above you need to test, test, and continue to test. There is no one-size-fits-all for markets and salespeople. Something that will work in one market will not work well in another market due to maybe oversaturation, consumers, and anything else you can name.  How to mitigate unexpecting costs that come up, is a battle that happens on every deal, but how we handle it is to keep the reps up. So the more houses we see the more stuff we can pinpoint that will be an issue with the house/property. Some things come up that might be hidden which could be piping that needs to be changed out under a raised foundation or something like that for example. 

I have found a few deals on the market lately for some clients that flip, the numbers still gave the flipper a profit and the rehab time was 5 weeks. The other ways we are getting deals are PPC/PPL. Stuff that is good to look into, it does cost a good amount to pay each month, but there are people who want to sell today and need a quick offer.