Where to Find Flips with tons of Profits in your market
Locating flips with great profits is a much different animal than finding rentals. Rentals you can purchase in less desirable areas, find good tenants, good property management and profit. Flips need more than just demand from renters, there must be demand from home buyers. You can find good deals in any market and area, as long as the numbers make sense. If you wish to do a lot of deals, here is a list of characteristics that are common in areas that are abundant with good flips.
- Pride of ownership – you can tell the difference between streets with renters and streets with home owners. Landscape and upkeep on the homes is much better in streets with mostly homeowners. There are better streets to find flips.
- Not too many properties for sale – Few homes for sale in the area signals strong demand. In addition to checking active properties for sale, check the sold comps and pending. Make sure the average time on market is not too long.
- 3+ bedroom 2+ bath – These houses are the most desirable.
- Not too expensive and not too cheap, average area – Although there are good flips in really expensive or really cheap areas, they are not as common. Areas close to average home price usually have the most opportunities for good flips.
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Comments (7)
Thanks for the comments guys. Dory, I am a firm believer you can make money in any market. I have associates who only invest in war zones and carry a gun when they go to the properties. The buy for next to nothing, make them rentable and manage them very aggressively. They cash flow thru the roof. Of course every once in awhile he has issues but with over 20 properties he is doing very well. I myself stay out of the warzones.
Ryan Moeller, over 16 years ago
Michael - You can certainly make money in war zones, but I'm not too sure that flipping is the strategy I'd personally go with. Then again, I'm not one for all the drama, so my interest in those areas ended a few years ago.
Joshua Dorkin, over 16 years ago
Actually, I don't entirely agree that there's a higher demand for SFHs than there is for multi-family properties (2-/3-/4-plexes, apts, etc). Although there are more SFHs than apts, and the volume of transactions involving SFHs is higher, I suspect the numbers are more or less directly proportional (especially in the markets where I invest). For example, the vacancy rate in DFW is roughly 5% in the areas that I farm, and the demand is high for apts and SFHs as flips and rentals. I believe war zone properties can make excellent flip/rental candidates provided one uses an appropriate exit strategy. For example, anyone who knows anything about the Detroit market will know that years ago many of the properties along the Detroit River near Greektown were considered to be a war zone. However, when the ex-mayor Kilpatrick helped to initiate various programs to revitalize that area, that war zone was repositioned into a gold mine. Something similar happened in Cleveland when the ex-mayor White helped to initiate similar initiatives in several of the "slum neighborhoods" and along the lakeside back in the 1990s. Nevertheless, I admit I believe it takes a lot more vision, time, money, and politics to invest in war zone properties.
Dory Peters, over 16 years ago
I admire those who can make money in the war zones.
Account Closed, over 16 years ago
So you don't think that war zones are good places to find quality flips? ;) Nice post, Ryan!
Joshua Dorkin, over 16 years ago
I totally agree, single family residences have more demand then multi units, land or property where most of the interest is from investors. You can flip property to investors, but they often want to purchase at a discount off market value thus you better factor that into your numbers when evaluating the deal. Thanks for the post Aaron.
Ryan Moeller, over 16 years ago
I think the best ways to find a "flipping opportunity" is to track done the ugly vacant houses. I would target low priced areas but not the "war zones". And I would also target single family houses since there seems to be an easier flip then an apartment building or some vacant land.
, over 16 years ago