Fix and Flip is one of the most profitable investment strategies in the real estate niche. It requires you to buy property below market value, fix or repair it, and sell it at the current market rate. In this article, we will be discussing ways flippers find investment properties to flip.
Multiple Listing Services (MLS)
Multiple Listing Service (MLS) is a system or database with accurate and structured data about listed properties. MLS is set up by a group of real estate brokers to share listing information of properties that are for sale among themselves or with the public. An MLS database can be found both online and offline.
Since the Multiple Listing Services (MLS) are marketed to the public (either online or offline), the competition is expectedly high. Therefore, it is not advisable for new and upcoming investors to use this strategy because you will be competing with experienced investors who can pay more and probably have cheaper renovation costs.
An auction is a place where undervalued properties are sold to the highest bidders through competitive bidding. Most auctions require buyers to either pay in full or pay five to ten percent deposit and pay the remainder within 30-40 days. Although an auction is a place to get a low priced property, buyers are expected to inspect the properties and compare them with their budget before the auction day to avoid buying a money-pit. In fact, it is advisable to hire a contractor or property inspector for more valued opinions and honest advice on your purchase.
This is a property seized by the bank or the lending institution because of the inability of the buyer to continue paying the mortgage. The homeowner either voluntarily deeded the home to the lender or it is forcefully taken. The process involved in buying a foreclosure is usually a normal transaction between a buyer and a seller. The only difference is that the bank is the seller and the property is usually sold below market value. Unlike a normal property transaction, buying a foreclosure requires certain knowledge and so buyers need to be experienced in these dealings to prevent unnecessary fees after closing.
Real Estate Tax Sales
The tax sale is a property put up for sale by the government because of the inability of the owner to pay the required tax on the property for a certain period. The difference between a foreclosure and a tax sale is that the first is sold by the inability of the owner to pay the mortgage while the other is sold because of the owner’s inability to pay property taxes.
Buying a tax sale is usually the lowest price on a home. One thing an investor needs to understand is that home purchases under these strategies often have a loan that needs paying. So, if tax sales interests you, you need to be careful and go back to your calculation table to draw your financing plan so as not to run into a problem.
House Knocking and Cold Calling
House knocking and cold calling is another way to buy a property. It requires you to drive around the neighborhoods that interest you. When you find a potential property, you can knock on the door and check if the owner is ready to sell. However, if the owner is not living there, you need to find the owner online and contact – Cold Calling. This strategy provides room for negotiation because the competition is low.
Finding investment property takes effort but if you know your way around, they pay off! One final thing to note is that when you want to invest in a property, you need to draw your plans, do your mathematics, calculate your finances, and work with experienced experts to avoid complications after purchase.