Distressed real estate flipping is one of the best ways to make money in a short amount of time. Reliable, and considered to be a somewhat affordable investment opportunity for regular people, this DIY real estate project isn’t always easy. The process of how to find distressed real estate properties and turning them into cash can be done, but you need to know the five-step process.
If you want to know how to find distressed properties, it is important to follow this simple five-step process. Then, call the office of Jeff Barchi to discuss other ways to locate privately listed properties.
How To Find Distressed Properties (in 5 steps!)
One of the hardest parts about flipping houses is finding the right properties. Use this list to learn how to find distressed real estate properties with ease.
Create a Budget
One of the worst mistakes investors make when they try DIY property flipping is understating the total cost. In order to avoid potential pitfalls, create a budget that includes wiggle room for unexpected problems. When creating your budget, factor in your current credit score, the long-term growth potential of investments along with expenses associated with property acquisition.
Perform an internet search that includes public MLS listings. Also known as the Multiple Listing Service, an MLS database provides information on houses for sale. This search can also be customized to include advanced options, so tell your real estate agent about any specific terms to include, such as bank-owned, REO, government-owned, delinquent mortgage, foreclosure, and others.
The marketplace contains a lot of data that you can use to evaluate the sale price after you flip a distressed property. The location is a #1 research priority when attempting to know which renovations should be done first. You may find that curb appeal is a better investment choice than updating interior aspects like kitchen backdrops or bathroom tile. Look for properties based on neighborhood zones, address, and highest sale price in the area.
It is never a waste of time to talk to other people in the real estate industry. This may include agents, brokers, community members, and more. You can learn from everyone you meet within the real estate community, and ideally, you will be able to build a supportive network that can sharpen your negotiating skills as well as flipping strategies.
NOTE: Never underestimate the value of a large network including neighbors, friends, advertisers, contractors, and other workers.
Make an Offer
Once you have done all of the leg work and spoken to a qualified professional about your goals, you can make an offer. Each property that you decide to purchase for a low price, make an investment, and flip for a profit, may also have competition.
So, make sure you know what the limits of your budget are and always set money aside to use during the negotiation process. Generally, market experts recommend at least 20% padding within your investment budget.
Finding Motivated Sellers of Distressed Properties
If you are able to locate properties publicly on the MLS, you may be able to find investment opportunities alone. However, you may not realize how many other distressed properties are available offline. Ask about properties with delinquent taxes and mortgage payments along with homes sold out of probate and government-owned property.
Remember that flipping houses for profit is not always a win for investors. Many times, a property can shock you with the cost of unexpected problems like plumbing leaks, electrical explosions, crumbling foundation, and many other things. Talking to a team member from the office of Jeff Barchi can help you avoid the most common mistakes investors make. Follow this process of how to find distressed real estate properties and turn an impressive profit.