Finding a Deal. Hard to find right now?

Question

Hey everyone, I’m fairly new to flipping. I was a loan officer for 6 years so I understand the industry well and just went full time to flip houses 2 months ago.

Question is - is it difficult for anyone else to find a deal right now with a decent return on it? Been cold calling, texting, driving for dollars, and bandit signs. I’ve come across a few leads but every house is being bought at thousands higher than where I need to be at. Even after cutting margins to try getting the deal.

Are most investors over-paying right now for their flips? Possibly hoping once they sell they can get a higher price due to market conditions? Or possibly NY hedge funds over-paying on everything?

Would appreciate any insight. Thanks in advance!

Will Barnard · Answer

As others stated, extended your network and letting everybody know what you are looking for can help. Working the leads you do get more creatively can also help. Having an internet presence with SEO to drive traffic to YOU is also a great avenue.

Yes, deals are thin and hard to come by pretty much in all non rural areas of the country. Just had a home sell for $40k+ over retail market value just because the buyers were tired of getting beat out so they offered ridiculously higher than the market value to get it.

Often times, spreads in deals are created so look to find/see something in a property that others are missing. Some value add opportunities are not visible to all and that can help create a spread for you. Adding SF at a cost below the per SF cost to build can also "create" spread. One must be very creative in this tight seller's market.

Joshua Janus · Answer

@Ryan Roberson There are still deals but in my market of Columbus, Ohio if you aren't ready to go pretty much right away someone else will take your deal as the competition is so high. If you are able to find a few sources that can bring you a consistent stream of deals, you are able to get your eyes on where the market is going and can pick up on what is truly a good deal to go after. Depending on your market, it might be better to accept a small margin when your calculating a deal as numerous markets are hot and you will end up waiting weeks or months for something to come up.

Jaron Walling · Answer

@Ryan Roberson Let's be honest it's insanity out there. We searched on/off market for the last 12 months. We have passed on a lot of deals. Number don't work or sellers refused to negotiate the price. I'm not investing $25k on a rehab and 3 months of my time just to make $5-7k. Factor in capital gain taxes and it's not worth it.

I'd rather work the 9-5 and continue doing side work. Inflation sucks but it's better than working for free.

Bob Romano · Answer

I lost out on a SFH yesterday. The other buyer paid $40k above asking and he put $25k into a savings account for the buyers new baby for her college fund! This is getting ridiculous now

Alecia Loveless · Answer

@Ryan Roberson My agent is showing me every possible lead that comes into his brokerage before they go live knowing I’ll close them quickly if they work for me. Some work out, some I pass on. Those I pass on go to the out of state investors who have just discovered our area and still think it’s cheap.

There’s deals to be found, you have to be diligent in your methods of finding them and in your follow up and in your networking. Don’t get discouraged. You’ll find a good one! Keep looking! It’s coming. You’ll find it soon.

Kai Kopsch · Answer

yes, it's getting tough to find off-market deals in our market. A lot of investors do their marketing like it is still 2010!  Cold calling, bandit signs, mailing lowball offers don't work in a Seller's market as good it was 10 years ago. I work only over the MLS past 3 years and my buy-and-hold clients are very happy with their appreciation. There are deals on the MLS you just need to be on top of things every day, I helped a Bigger Pockets member buy a property on Lake Norman last November for potential short-term rental. This home appraised 150K over accepted offer not bad for 4 weeks. I'm working on an MLS transaction for myself appraisal came back 40K over the accepted offer price.

Bob Romano · Answer

i wish i was Jaron

Jaron Walling · Answer

I hope you're joking.

John Steffen · Answer

John Teachout's last sentence is gold. Deals are out there; as long as you are actively hunting you will find one. Once you do, be sure to capitalize efficiently because someone else is right behind you.

Secondly, the lead gen strategies you're using are awesome; but I'm sure you have figured out that most of those leads you're cold calling are already bombarded with wholesalers/flippers. Two helpful tips that are commonly expressed, but not commonly put to action: 1) separate yourself from the pack; build a genuine relationship with those leads and don't underestimate the power of follow-up. 2) The more players in the game you know / the more people who know what you do (other flippers, rental buyers, lenders, contractors, etc) the higher probability an off-market opportunity falls in your lap. This is valuable on a number of levels, of course, but in doing so you're throwing yourself in luck's path.

Finding a Deal. Hard to find right now?

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