To learn How To Find A House To Flip, you must first recognize what features make a property valuable.
One of the most important steps in flipping a house is finding the right property. Some people even say that once you’ve signed the paperwork and officially purchased a house, you’ve sealed your fate in relation to the profit you will make.
While there are certainly some variables when it comes to rehabbing and selling, for the expert house flipper, these steps are more or less constants. Seasoned flippers are familiar with their contractors and know how much repairs cost. They also know how much they will be able sell a house for. For these people, the buying process is the game, set and match.
So when searching for a house, it is wise to know what you should look for. Moreover, if you want to learn how to find a house to flip, you should educate yourself on what makes a property valuable.
That being said, just because a property has some, or all, of the attributes in the following list does not mean you should necessarily buy it. It all depends on the value compared to the price.
Buying real estate is similar to fantasy football. While Greg Jennings is a great wide receiver, you wouldn’t choose him for the first overall pick in your draft. With real estate, a house might be in a great neighborhood with some great features, but you don’t want to over pay for it. Conversely, if the home has negative value, you should only consider buying if you can negotiate down considerably.
Below are five of the most important features that make a home valuable:
1. A Strong Foundation
As a house flipper, your job is to take something unattractive and make it attractive. A home that is aesthetically unpleasing and rough around the edges makes a great fixer-upper. However, a house with a major structural problem is something you should try to avoid.
Damages to the foundation cost significantly more to fix than some peeling paint or an un-mowed lawn. You want to rehab the house to make it more presentable, not rebuild it from the ground up. A rough looking house with a strong foundation is always more valuable than a nice neat house with a structural problem.
2. A Good Neighborhood
Possibly the most important feature to consider when determining the value of a property is the neighborhood. The neighborhood sets a minimum or a maximum for the value of a home.
If you buy a home in an impoverished neighborhood, there is only so much money you can make. When rehabbing a property in one of these areas, you will reach a point where spending more money will not increase the value. You could install marble countertops and cathedral ceilings and even a bowling alley to the basement, but you would still only be able to sell the house for so much.
If you do decide to buy a home in an impoverished neighborhood, don’t go crazy with your budget.
Sometimes, your best option might be to buy a rundown home in a good neighborhood. This way, you can improve the value of the house to meet the standard of those around it.
3. Prime Setting
While the word “setting” sounds similar to “neighborhood”, the words carry two different meanings. A neighborhood refers to the other houses close in proximity and their respective values. The setting, on the other hand, refers to the features near the property.
For example, a desirable setting would be something like a beachfront or lake front property. Maybe the home is in a country club or near a park. All of these features would add value to the property.
On the other hand, if the house were near a heavily trafficked area like a railroad, a highway or an airport, the house would be worth considerably less. Other examples of things that could devalue a house would include power plants, factories, or newly developed commercial areas.
4. A Reputable School District
A large percent of people buying a new home are families with at least one child. Because of this fact, education is one of the main concerns of this demographic. It should be one of your main concerns too, because it helps determine the value of a property.
If you find two comparable houses for the same price in different towns, the smart choice would be the house that is in a district with the better school system.
You might not always have a choice, however. Sometimes you just have to take whatever you can get as far as real estate deals go. Still, you should realize that property prices change from town to town for this very reason.
5. Weak Competition
Finally, the most fluctuating variable in house flipping is the market. If you are one of the only investors selling a particular type of property at a set time, your property will be worth a great deal.
However, if you have to compete with many other investors selling houses just like yours in the same neighborhoods, you will have to lower your asking price to even be considered.
As a house flipper, when you are searching for good properties to purchase, you want to get the best deal for your money. Sometimes, there are ways you can buy these houses well below market value through unconventional means.
