Where Are Experienced SoCal Flippers Finding Deals in 2026?

Question

My business partner (an architect and GC with 20+ years of experience) and I have been searching for fix-and-flip deals that meets the 70% rule in Southern California. So far, we've primarily looked through the MLS and a few wholesalers (Fair Trade and Western Homes). Most of the deals we see have margins under 5%, especially when using hard money financing.

We’re starting to feel that the only way to find solid opportunities may be to generate our own leads—similar to what wholesalers do through cold calling, driving for dollars, and other direct outreach—but that’s not really our area of expertise.

I’d love to learn how experienced flippers in this community are consistently sourcing good deals in today’s Southern California market. Any insights, strategies, or connections would be greatly appreciated, and I’d be happy to connect with others who are actively flipping in the area. Thanks!

Bo Smith · Answer

The 70% rule gets crushed in SoCal right now, and honestly you're seeing it clearly. Most MLS deals are bought by experienced investors who already have deal relationships locked in before they hit the public market. Your instinct to generate your own leads is right, but let me offer a different angle than cold calling.

Bird dogs work better than cold calling in tight markets like SoCal. Find contractors, property managers, wholesalers' assistants -- people who see distressed properties before they hit MLS. Offer them 00-2k per deal you close. That networks you into the real deal flow. You'll find stuff off-market because you're not competing with every other investor on the platform.

With your GC partner's background, you should also be talking to estate attorneys, probate specialists, and REI groups in your market. Estates and probate deals skip the market entirely. The math on those is usually 60-65% ARV because the heirs just want it gone. That's where your 70% rule actually works.

Your hard money financing is solid once you have a deal. What's holding you back is deal sourcing, not analysis. How many bird dog conversations have you had so far with contractors and property managers in your target neighborhoods?

Eric Huang · Answer

Hi Bo, thanks for the insightful comments — I think you’re pointing us in the right direction. It makes sense that we should focus more on building connections rather than trying to do cold calling or D4D ourselves, which is really a different business model.

My business partner has mostly worked directly with homeowners in the past. While he knows quite a few contractors, those connections haven’t really translated into deal leads so far. We also haven’t explored relationships with property managers yet.

Do you have any suggestions on how to find and connect with property managers who might bring distressed leads? Are there particular places or approaches that tend to work best in your experience?

Dan H. · Answer

I see a lot of responses on sourcing deal and there are some good posts on finding deals.

I want to post on something else.   With the higher value of value adds, you do not need the same margin as markets were value adds do not add similar value.

My last flip offer was of a down to studs condo with the demo already done.    Our offer was at 78% ARV.   Note this is not our offer plus rehab being 78% of ARV.  The purchase and rehab was 85% of ARV.   Percentage wise, very slim.   With our preferred financing we were projecting $30k to $40k return on 4 month hold.   Because of the preferred financing another month or two of hold was not going to effect the profit much.  Note half that hold time was selling time.

Purchase is not the start of the effort.   We walked the unit twice, the second time with the contractor that was doing much of the work.

2 months for rehab.  Our effort is done at that point.  Then list a little below what we could potentially sell for if we wanted to be more patient.   Goal is an accepted full price offer within a week.  If we get lucky maybe multiple competing offers to get unit to full value.

That $30k to $40k profit could not be hit on a 78% purchase of ARV (or 85% acquisition plus rehab of ARV) in lower cost markets where the value adds do not add as much value.

It would be great to find 70% of ARV that is not in shambles needing a rehab budget in excess of 10% of ARV and that will take near half year for just the rehab but the competition is fierce.

I will note some things about the condo:

- because demo was already complete (down to the studs) and walls open and it being a full gut job, surprises on the work of the rehab was very unlikely.   We could see the plumbing and electrical.   We knew all finishes from drywall out had to be redone.  We were unsure on the hvac condition (most of it was still present including the condenser but we were unsure any of it worked) so included hvac replacement in our underwriting.

- preferred financing reduced risk associated of a slow sale.  Without the preferred financing, we would not have pursued this purchase.

- the short timeline reduced risk of substantial depreciation.

- our biggest risk was the condo HOA.  The cc&r did not reduce the risk associated; it stated quite a few things that needed approval including any drywall changes (this would include adding/removing walls so I thought it was a creative way to be very encompassing).   The cc&r states it can take up to 6 months to get approval.   What we did to try to reduce this risk is reach out and find how long approvals typically take and it was a reasonable couple weeks but that does not fully reduce the risk when by cc&r they could take 6 months (do not get on condo HOA bad side if you are flipping a condo).  Our preferred financing could save us from a beating if this risk manifested, but the profits could evaporate and we do not work for free.

in summary: same profit in terms of dollars can be made on thinner margins in the high cost markets because the value added by value adds is greater.   Evaluate the risks along with the thorough conservative underwriting.   If something is unknown (such as the hvac in my example), underwrite it as worse case.   It is rare (possibly never) that a flip is risk free. Good luck

Bo Smith · Answer

SoCal is hard right now. Fair Trade and Western Homes are solid wholesalers, but they're selling to the same pool of buyers you're competing against. You're right that margins under 5% aren't workable -- that's basically saying the market doesn't have a deal for you, not that you need a different sourcing strategy.

The 70% rule is dead in SoCal when ARVs are .2M and up. You can't find a 00k house that costs 00k to buy. So what works: off-market networks (probate companies, estate attorneys, property managers handling problem properties), direct mail to absentee owners, partnerships with other GCs who have job lists and referrals, and honestly, wholesalers from adjacent areas (San Diego, Inland Empire) who find deals and bring them north. You could also look at REO (bank-owned) properties as they come on market -- there's less competition there.

Your biggest advantage is having a GC in-house. That credential alone gives you credibility with wholesalers and hard money lenders. I'd focus on building those relationships rather than trying to DIY cold calling. Can you leverage your GC's existing network -- other contractors, developers, agents he works with -- to source deals?

Erik Estrada · Answer

I am finding deals off market through realtor pocket listings. They usually get first dibs and send to their loyal investor clients.

Peter Mckernan · Answer

The SoCal market is so hot and so many people are flipping and getting off-market/on-market deals. You need to continue to network with realtors, wholesalers (smaller shops), and people at meetups. The ones that make sense are 60% rule not the 70%... I know that is going the other way then you would like but the deals are harder to sell, and the DOM are even longer. So, I would really be running numbers on all deals and the big shops like you mentioned really just list at market value.

You need a good rep that you can find at like a seller's advantage, or someone that will bring you solid deals and get you the first place in line. The ones that are deals (I have one listed now) are going way over asking (had 20 offers and sold for $60K over asking), not sure how they are making money but really that is neither here nor there.

All-in-all you need to be scrappy.. And doing your own deals PPC/PPL and others will take a lot of money so if you have the capital ($3000-$5,000) to start. You need to be first to call back and really need to be on the phones!

Bo Smith · Answer

Eric, SoCal's been tough. The 70% rule with hard money is basically impossible right now because ARVs are soft and acquisition costs are high. You're right that most MLS deals have razor-thin margins -- if any.

Here's the reality: the only way to compete in that market is to generate your own leads. Cold calling, direct mail (if you can afford the volume), and driving for dollars. Your GC with 20+ years of experience is actually your biggest asset here -- contractors get early access to deals through their networks. Make sure he's actively talking to homeowners, property managers, and other contractors. Word of mouth from experienced subs is worth more than any marketing campaign.

One thing that works in SoCal specifically is targeting estate sales and probate situations. Those buyers are often motivated and don't market aggressively. You can find them through probate court records, estate attorneys, and local wholesalers who specialize in that space. Also, try reaching out to local property managers directly -- they find off-market deals for their clients all the time and might partner with you.

Skip Fair Trade for now unless you have a relationship. Western Homes is better but they're also flooded with inquiries. Build your own pipeline. It takes 6-12 months to see results, but that's the only sustainable model in a competitive market like SoCal.

How much volume are you able to commit to lead generation per month -- is this a full-time operation for you both?

Eric Huang · Answer

Thanks for all the valuable comments!

It seems that partnering with realtors or experienced deal finders makes the most sense for us. Wholesaling ourselves isn’t a great fit due to the time commitment, and it’s not our core focus. Instead, we’re focused on closing and executing the renovation projects. If someone is able to bring strong off-market or value-add opportunities, we’re happy to structure a profit share so everyone wins. Our goal is to build long-term relationships with people who consistently bring good deals.