How to Find Good Houses to Fix and Flip

I recently decided to look into flipping houses for a living. This is buying, fixing and selling a distressed house in a short period for profit. A small commitment of time and labor will improve a neighborhood and turn a profit. Real Estate is a great option for investment because it can provide larger returns in a short period. One of the first steps to take is to find property that is priced low enough to leave room for repair, replacement and re-sale closer to the market value.

How to find houses to fix and flip? The following websites, suggestions & google searches can be used to find houses that are “distressed” or owned by “motivated” sellers:

Google: [County Name] Legal Notices
Google: [city] Tax Assessor
Local: Look for “For Sale by Owner” signs
Online: RealtyTrac.com, Redfin.com, Zillow.com, more…
Online: Foreclosure.com, LoopNet.com, craigslist.com, more…
Government: www.hud.gov/topics/homes_for_sale
Probate: SuccessorsData.com, USProbateLeads.com

Using these resources we will find single family homes that are priced well below market where they can be purchased, issues fixed, prepare it for sale and sold for a profit. There are many online resources and offline techniques available to find houses to fix and flip.

How To Find Distressed Properties

Distressed properties are sold below the market value and are the prime resource for home flippers. Definitions online state that the ‘distressed property is being sold for a value below its market for 1 or more ‘reasons’. Since nobody wants to list their home with the term “distressed”, or “cheap” in the description, we will need analyze the price and details of the sale to find opportunities for a flip.

How to Find Houses Locally

Anyone can find houses in distress everyday just by driving to work or around their own neighborhood. Properties that stand out will have signs of neglect on the outside where the home owner is unable or unavailable to maintain it. Look for items such as:

All interior and exterior lights are off at night
Overgrown yards where the lawns are filled with weeds
Broken windows or shutters
Damaged fencing or walkways
Litter or scattered debris
Faded paint that may be peeling (Home and Garage)
Notices post on doors or windows (possible sheriff sale or ceased notice)
Newspapers sit for days or the mail box is filled with junk mail
Are there cars in the driveway?

Also, if there is a notice posted on the front door or windows, this may reveal the properties current status such as per-foreclosure. These items will not tell the whole story but they are visual cues relating to the houses curb appeal that can red flag a property.

If the owner happens to be home on a Saturday afternoon, speaking to them about the property might reveal that they have been considering selling due to their age or loss of interest in keeping up the property.

How To Find Motivated Sellers

A seller will be motivated for 1 reason or many reasons. The property is too much work to upkeep or the owner just physically can’t handle it. There could be issues with the property that is outside the owners income so they ignore or hide it.

Another issue is homes that have delinquent taxes, this is an opportunity where the property does not need major repair but the taxes have not been paid. The flipper will purchase the property, bring the taxes to current and do some minimal work to prepare the house for sale. Some of these houses can be found by doing a Google search:

[City Name] Tax Assessor

[County Name] Tax Assessor

Google can also be a resource for properties with delinquent mortgage payments, underwater or other legal notices. Google search:

[County Name] Legal Notices

Be careful and include the taxes due into your formula when calculating the repair costs. You are expected to get these costs back plus a profit in the end.

Searching Online | Homes

The simplest method to find a house for flipping is the online marketplace. This is a small list of the larger websites available that are mostly free. There are too many sites to go through each option and how they work for finding fix and flip opportunities so this is a summary of some of the more common search items to use.

Each site has their own method for search and filter so this will be a general instruction on finding properties using these tools and we will use Zillow as the example. Translate the instructions by site

FOR SALE

The search tool will default to include all records except for the ‘Sold’ houses. This options should be set to look for houses for sale but remove things like new construction, apartment’s or land.

Foreclosure, Pre-foreclosure, Auction and Make me Move should all be included in the search as foreclosure is a common area we find flips.
The ‘Sold’ option can be used to research previous sales in this area and what they went for. This helps with bracketing the price filter setting too.

PRICE

The price filter will also require some thinking as we can find flips at the lowest range. The map display will helps to identify the average and LOW price range for the area viewed. Each house in the result will have the price floating above its icon. If most of the houses are priced above $100K then we set the HIGH price to something like $70 or $80K.

Conversely to filter out mobile homes we can set the low price to $20K. So in this example our range is $20K – $80K including foreclosures and auctions. Increase the high price if there are no results appearing on the map as the area may have a higher market value. The important point is to develop a budget using numbers close to reality.

TIME

The longer a property is listed the more likely this is due to an inability to sell. (barring serious market changes). Use the ‘time listed’ to identify houses that have been listed for more than 60 days. use this in conjunction with the price to find houses that have been priced too high but the listing was not removed.

House listings tend to be removed during the winter months as people usually start going to open houses in the spring. Homes can still be sold when they are not listed, this is called an off-market sale.

Real Estate Websites:

Note: many of these sites use their own methods of valuation when estimating the house price. Before making an offer on any house to flip be sure to do a full comparative analysis for a more accurate price expected at sale time.

How Do I use Craigslist.com To Find A Fix and Flip?

Craigslist is unique in that it is free and public so you will find more “For Sale by Owner” listings looking for buyers to buy distressed properties or looking for a no-agent quick sale.

The other active posts will be local wholesalers who are looking for cash buyers and they can confuse things or just waste time. Some wholesalers will post a house for sale but when you contact them they say “it’s no longer available” but they have another house that’s similar. (basically its a bait and switch)

Luckily Craigslist.com has a search option that can be used to filter out the noise. This can help to find those motivated sellers that may not know how to post or how to upload a picture. Here is a short list of search terms to try:

Search Terms:

Handyman special
Cash Only
Cash sale
Investor Special
Investor Only
Fixer
Estate sale
Probate
Must Sell
Bank owned
Foreclosure
OBO
Motivated

Since this is a free and public classified tool, be careful when contacting and meeting with the home owner. Get the address and look up the current owner of the property before scheduling a face to face meeting. Google street view can also provide an image of the property from the street.

School Districts for Fix and Flip

A great online resource is https://www.greatschools.org/ where you can search for the property address or just zip-code and it provides a school rating for the schools in that area. Along with basic market research this can help identify more attractive or less attractive locations for the sale portion of flipping the property.