How to Approach Flipping When Talking to a Real Estate Agent

5 Replies

Hi,

Silly question. We have one buy & hold investment property and are thinking about trying our hand at flipping in the same area. When talking to real estate agents, would I really say something like: "We want to make a ton of [low ball] offers on fixers for the purpose of flipping one of them." It seems like that would annoy a real estate agent, but maybe I'm wrong?

@Melissa Nichols

Usually, you say you're looking for investment properties, discuss what parameters you wish to work with. The agent will share listings with you within those parameters. Depending on where you are operating, you won't find 100 properties to bid on all at once. You'll find a handful at a time that look interesting. Unless you plan on bidding site unseen, you'll spend most of your time screening potential leads, viewing several, and then maybe putting in 2-3 offers at a time. Maybe it will be 100 homes over the course of one year, but it won't be in 1 week. Of course, that will depend on what you're willing to consider in your parameters.

I would be as honest as you can with your realtor. If you're expecting to look at 50 properties and buy one 1 - that's fine as long as you're both on the same page.

Be realistic with your price point and amount of work you're willing to tackle and go from there.

When I started into this, my realtor took me on a 10-house-in-one-day whirlwind tour, some picked by him, some by me. It gave us both some good understanding about what I was actually looking for.

(Turns out one of those 10 turned into a pretty good cash flowing BRRRR)

Originally posted by @Christopher Phillips :

@Melissa Nichols

Usually, you say you're looking for investment properties, discuss what parameters you wish to work with. The agent will share listings with you within those parameters. Depending on where you are operating, you won't find 100 properties to bid on all at once. You'll find a handful at a time that look interesting. Unless you plan on bidding site unseen, you'll spend most of your time screening potential leads, viewing several, and then maybe putting in 2-3 offers at a time. Maybe it will be 100 homes over the course of one year, but it won't be in 1 week. Of course, that will depend on what you're willing to consider in your parameters.

You certainly don't start your conversation the same way as your example. Secondly, if you are talking to agents, then you are likely looking to shop the MLS and as such, any offer not somewhere within reason of the ask price (assuming the ask price is within reason of current market value and not drastically over or under priced), then you don't have much of a chance of a response let alone a counter. In other words, define "low ball offer".

The other thing you need to look at when going down this road is the ability to create a spread at purchase by finding deals that go from pending back to active or those with high days on market (DOM). Targeting is necessary if you shop the MLS in this sellers market we find ourselves knee deep in. Creating spreads through certain investment plays is also quite necessary today. The days of buying a house and just doing theblandscape, paint, and flooring are gone, there is just not enough room for the investor so you must find deals that require much heavier rehabs.

There are certainly other nets you can cast t shop deals but I don't want to take this  conversation too far off your topic.