One of the greatest challenges a fix-and-flip investor will face is finding good properties to flip. This is especially challenging for house flippers operating in extremely competitive markets where cash buyers are snapping up good deals as soon as they hit the market. The good news is, simply by networking with local wholesale real estate investors, you can greatly improve your odds of finding properties to flip.
Wholesale Real Estate Investors Focus on Finding Deals
If you are a house flipper operating in a highly competitive real estate market, make sure your fix-and-flip business plan includes scheduling time to network with wholesale real estate investors. These investors dedicate their time and talents to locating distressed properties that have plenty of profit potential. They do the tedious work of "driving for dollars" and searching legal records for possible deals, and they negotiate a sale contract with the homeowner. A wholesale real estate investor will be eager to transfer that contract to you for an agreed-upon fee. In many cases, investors can purchase the house flipper's properties at a price low enough to support a healthy after-repairs ROI.
A skilled wholesale real estate investor will know how to calculate ARV and look for properties where there is profit available in the assignment while leaving plenty of profit margin for the house flipper.
Wholesale Real Estate Investors Internet Meet-Ups
If you do not currently have business relationships with a few skilled wholesalers in your area, you definitely should seek to build those relationships. Although the social distancing protocols brought on by the Covid-19 pandemic have prevented most in-person meetups, wholesale real estate investor groups, have moved their meetings to the Internet, and they will welcome you to join their Zoom conference calls.
In these online meetings, real estate professionals from every part of the industry come to share successful property acquisition strategies and other real estate-related aspects of the local market. These groups will comprise active professionals from every niche of the real estate investing industry seeking to establish connections with other industry professionals for mutually-beneficial interactions. Also, you will find highly motivated investors who are actively looking for buyers for their existing and future property sale contracts.
A well-established, high-functioning investors group will include wholesalers, real estate agents, contractors, capital investors, and other individuals from whom you can gain valuable knowledge regarding the local market and with whom you can establish beneficial business relationships. Building relationships in these meetings with local fix and flip investors who have built successful house-flipping businesses is also a great way to build your entrepreneurial skillset and stay motivated to achieve your goals. Also, connecting with skilled wholesalers who can bring you distressed properties below retail prices will help you grow your business.
Be Sure to Vet These Investor Groups - Ask Questions in Advance
Be aware, however, that not every “real estate investors meetup” is a gathering of professionals looking to network. There are also some for-profit companies out there whose advertisements invite you to “join an investors group,” but their ultimate goal is to sell you a house flipping education program. You may or may not want to buy what these businesses are selling, but you should be aware that a not-for-profit “meet-up” will not require you to purchase a program. Just be sure to ask questions and perform your due diligence before joining.