Upstate NY · Member since 2019 · 7 posts · 2 votes
Hi, this is a question to anyone who has flipped property. Do you factor in the neighborhood's liquidity or turn over rate before buying a property to flip? If yes, what is your primary source for this information? To be clear, I am not asking about neighborhood comps. I am asking about the number of houses sold in a neighborhood over a certain period.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
7y
I will look at an area's housing supply before I decide to flip in that area. A local realtor can generate this information by running an MLS report or you can probably find it when your local Real Estate Association website.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
7y
I will look at an area's housing supply before I decide to flip in that area. A local realtor can generate this information by running an MLS report or you can probably find it when your local Real Estate Association website.
Upstate NY · Member since 2019 · 7 posts · 2 votes
7y
@J Scott, thanks for the response. When you say area, do you mean the zip code or certain mile-radius around the property? Would you mind sharing in general, what kind of supply metrics you look for?
@J Scott, thanks for the response. When you say area, do you mean the zip code or certain mile-radius around the property? Would you mind sharing in general, what kind of supply metrics you look for?
It depends. If I'm investing in a really big city, then metrics for the entire metro area might suffice, as large cities tend to be pretty homogeneous in terms of housing supply. As an example, I invest around Baltimore City, and I'm happy to look at supply data for the city and surrounding counties.
On the other hand, if I'm investing in a small market, I might care about one little town, or even one part of a town. For example, I used to invest a lot in Austell, Georgia, which has about 50K people. I'd actually divide the town in half and look at supply numbers for each half, as they were very different sub-markets in that little town.
As for what I'm looking for, I want to see that supply is falling (faster sales) or holding steady. I don't want to supply rising. I'd rather be in a market where supply has gone from 12 months to 9 months over the past quarter than a market that has gone from 3 months to 4 months in the same period of time.
Falling supply means that I either have less competition or more potential customers -- either is good. Rising supply means just the opposite.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
7y
Oh, one other thing worth mentioning -- if you have a large farm area that you're looking at, considering separating the housing supply data between areas with good schools and areas with bad schools.
You'll find big disparities there, and in some places, it's profitable to flip in small pockets of good schools, even if it's not profitable to flip in the larger geographic area.