For a successful fix-and-flip investor, one of the most challenging aspects of doing business is finding viable distressed properties to flip. This is especially true in very competitive markets where properties priced below retail are snapped up by investors as soon as they hit the market.
If this is the case in your market, make sure your fix-and-flip business plan includes strategies for locating and acquiring off-list properties that can be purchased at a price low enough to support the minimum project ROI you've set for your business. One property finding strategy that can save you time and money is networking with real estate wholesalers who do the tedious work of finding viable properties for you. The wholesaler will negotiate with the seller and execute a purchase contract for an agreed upon sales price and then sell that contract to a fix-and-flip investor. A skilled wholesaler will know how to accurately estimate ARV, and will only acquire properties with the goal in mind of making a profit on the assignment, while leaving plenty of profit margin for the flip investor as well.
If you are not already working with skilled wholesalers in your area, you definitely should have a few of them on speed dial. A great way to meet the wholesalers in your market is to join local meetups where real estate investors gather to network and share strategies and successes. At these meetings, you will find highly motivated wholesaling professionals who are looking for buyers for their current and future contracts. A real estate investors group will be comprised of professionals from every part of the real estate investing industry, each seeking to connect with other industry professionals for mutually-beneficial interactions. A high-functioning, well-established investors group will include contractors, real estate agents, capital investors and other individuals from whom you can gain valuable knowledge and advice, and with whom you can establish business relationships.
Perform Due Diligence Before Joining an Investors Group
Networking with and learning fix-and-flip tips from local real estate investors who have built successful house flipping businesses is a great way to build your skill set and stay motivated to achieve your goals, and connecting with wholesalers who can bring you viable deals can be a great resource for growing your business, but be aware that not every “investors group” is a gathering of like-minded professionals looking to network. There are some for-profit companies who advertise “join an investors group,” but their goal is to sell you a house flipping education program. You may or may not want to invest in what these companies are selling, but just be aware that if you are looking for a not-for-profit “meet up” with other investors, you should ask plenty of questions and do some research before joining.
If you’re interested in applying for fix-and-flip financing for your next project, feel free to submit a new deal or contact us with any questions you may have and we’ll do all that we can to help you every step of the way.