Are the flipping days (soon to be) over (again)?

Question

Hi all,

I can't help but notice that everywhere I research, I come across this theme of several markets across the country being overheated. I live in one of the more expensive RE markets in the country - Boston - and I hear no different. This doesn't give me much confidence, as I'm building out my education gameplan to start investing, and I think it will take me, liberally, until June 2016.

If it takes until then, will I be too late? Inventory is already low, competition is high, and sales prices seem relatively exaggerated (MLS is also barely of any use). What are the signs I should look for/track to tell me what direction prices would likely be headed (obviously this isn't a perfect science)? What general guidance would you give to someone who is considering having his first deal be a flip 6 months from now?

How do you guys recommend I start/what options do I have to adjust to the dynamics in my market?

Thanks so much! -Francisco

Francisco Feliz · Answer

Thanks for this, guys.

@Russell Brazil, that's a great statistic. Since many non-rehabbed homes can be off-market, where can you find the data on what those prices are to get a sense for that gap? Makes a heck of a lot of sense to go for gentrifying areas, though.

Account Closed

May I also ask everyone-

Are there particular motivated seller populations you tend to like for flips? Divorces, probates, bankruptcies, fire damages, etc.? Or does it not really matter?

Sean Kremer · Answer

My business is flipping like crazy........you have to put your head down and root out good deals....They don't always fall in your lap.....If your standing in a crowd of investors with money in their hands, you are probably wasting time.....Just my opinion....There are a lot of people out there that will pay way too much for things, either because their situation is different, or they are not that good at what they do?? :)

Wendell De Guzman · Answer

Yes FLIPPING is getting harder.

Why?

It's harder to find good deals. Lots of newbies entering the market.

But successful real estate investors always find good deals whether the market is going up, down or sideways.

5 months ago, I posted several posts (6 to be exact) on this topic. I named it "The Science of Finding Deals"

Here's Post #1 about it (you can use BP's search bar to find my 5 other postings on):

https://www.biggerpockets.com/forums/48/topics/213028-the-science-of-finding-real-estate-deals

Russell Brazil · Answer

Flipping is not dying, just the more novices do not understand how to locate the properties. In order to find homes that are flippable, you merely need to locate the neighborhoods where there is a big price spread between rehabbed homes and non rehabbed homes. Often times, though not always, these can be found in gentrifying areas.

Al Canaveral · Answer

Hi @Francisco Feliz,

I agree with your observation of the market, here in Chicago we are seeing the same "overheating" of the market, specifically in overpriced REO properties. That's why my team and I formed a Real Estate Team, ALCARA Group, and we work exclusively with investors. We are experienced real estate professionals that understand the Chicago Market and are offsetting this hurdle by helping our investors purchase through the auctions, off-market opportunities, and through our wholesaler network. I think your best bet is to target hot areas and target off-market deals until the MLS levels out. Best of luck on your first deal in 2016!

Francisco Feliz · Answer

Hi BP,

I just wanted to revisit this thread and see if anyone had thoughts on the flipping environment in your markets these days and further advice on some of my questions on what to keep an eye out for. Would be very helpful for someone just entering the arena!

Thanks.

Mike Hurney · Answer

@Francisco Feliz Hidden/Off market search for property.

Sorry we missed you Friday!