Welcome to the thrilling world of house flipping! This is where you turn neglected fixer-uppers into dream homes, and in the process, secure handsome profits. If you're fascinated by the transformation of spaces and the prospect of generating a substantial income, house flipping could be your ideal venture.

But it's not just about buying a house and selling it at a higher price. The magic happens in the beginning - finding distressed properties. And while it might seem daunting at first, with the right strategies and a keen eye for potential, you'll be flipping houses like a pro in no time. Let's dive into the basics of house flipping and set you up for success in this exciting endeavor!

What is a Distressed Property

Distressed properties represent an excellent opportunity for house flippers for several reasons. First, these properties are often priced below market value (cheap houses) due to their less than optimal condition, which means you can acquire them at a lower cost. This is the key to maximizing your return on investment in the flipping process.

Second, these properties frequently require substantial renovation work, allowing you to add significant value through thoughtful, high-quality improvements. By transforming a once-distressed property into a desirable home, you can command a higher selling price, driving your profits upward.

Remember, the gold isn't in the house as it is, but in the potential it holds! So, don't shy away from distressed properties – they could be your next big payday!

Types of Distressed Properties

There are several types of distressed properties that can prove lucrative for house flippers:

1. Foreclosures: These are properties that have been repossessed by lenders after the previous owners failed to keep up with their mortgage payments. Lenders often sell these properties at below-market prices to recoup their losses, making foreclosures a great opportunity for house flippers.
2. Short Sales: In a short sale, a homeowner sells their property for less than the amount owed on their mortgage with their lender's permission. This usually happens when the homeowner is facing financial hardship and the property has lost value.
3. REOs (Real Estate Owned): These are properties that have gone through the foreclosure auction but failed to sell. They are now bank owned properties, who often wants to sell them quickly to minimize their losses, which could mean a lower price (cheap house) for you.
4. Auctioned Properties: These are properties sold at auctions, typically due to tax liens (behind on property taxes) or foreclosures. These can be risky as they often don't allow for a thorough inspection before the purchase, but they could also offer significant discounts.
5. Probate Sales: These properties are being sold as part of an estate after the owner’s death. Relatives may be eager to sell these properties quickly, providing an opportunity for house flippers.

Each type of distressed property comes with its own set of considerations and potential challenges. However, with careful analysis and due diligence, you can turn these properties into profitable house flipping projects.

5 Ways to Find Houses to Flip

1) Search the MLS

The Multiple Listing Service (MLS) is an invaluable tool for real estate investors. Essentially, it's a database established by cooperating real estate brokers to provide data about properties for sale.

It enables real estate agents to see one another's listings of properties for sale, providing detailed information about such properties. This can include everything from the number of rooms and square footage to photographs and even seller concessions.

For a house flipper, the MLS can be a treasure trove to find cheap houses, offering a vast array of distressed properties that could yield significant profit and/or cash flow after renovation.

Steps

To find distressed properties on real estate listing websites we want to find properties undervalued.

1. Get median sales price of the city: Search in Google "median sale price of {ctiy}" to find the median price homes sell for in an area.
2. Go to a real estate marketplace: Open a website like Zillow to search for properties on market within the city you want to house flip.
3. Filter down: Filter on price for finding houses that are less than the median sales price.
4. Review photos: View photos listed by the real estate agent of the property. Here you want to find properties with that are distressed or have been neglected such as out-dated fixtures.
5. Read descriptions: Review the property description to look for key words that signal distress like "selling as-is", "repair value", "good for flipping houses", and "motivated seller".

Once you compile a list of properties you want to see you can reach out to a real estate agent to tour the property. If it is a foreclosed home touring the property may not be an option, however you can still walk the local neighborhood to assess the risks involved.

Pro Tip: Automate finding fixer uppers on the MLS

Searching for fixer uppers on the MLS can be time consuming. By using Coffee Clozers you can automatically find houses to flip.

Coffee Clozers uses artificial intelligence to auto detect fixer upper properties based on image recognition and natural language processing on property descriptions. Here is how you can instantly search for fixer uppers:

1. Filter on Show only fixer uppers

2. Review properties with Fixer Upper tags

Not sure where to invest within the city? Check out Coffee Clozers's sophisticated heat maps to find the right property in up-and-coming areas to maximize appreciation.

You can use the property calculator to estimate asking price, rehab costs, closing costs, and gross profit to determine if the flip property is a good real estate deal.

2) Use Automated Online Sources

Automated online sources have revolutionized the process of finding potential fix and flip houses. Websites such as Auction.com, RealtyTrac, and Foreclosure.com specialize in distressed properties and can be a goldmine for house flippers. Here's why:

1. Wide-ranging Database: These platforms provide access to an extensive database of foreclosures, bank-owned properties, and short sales, often not available on traditional real estate websites.
2. Automated Alerts: You can set up customized alerts based on your preferences — location, price range, property type, and more. These alerts ensure you get instant notifications when a property matching your criteria gets listed.
3. Detailed Property Information: These sites provide comprehensive property information, including condition, outstanding debts, liens, and estimated repair costs. This detailed information can help you evaluate the potential return on investment more accurately.
4. Online Bidding: Some of these platforms offer online auctions, allowing you to bid on properties from the comfort of your home or office. This saves time and streamlines the property acquisition process.

Harnessing the power of these automated online sources can give you a competitive edge, helping you quickly identify potential deals before other real estate investors.

Pro Tip: Automate finding motivated sellers off-market

Websites like PropStream allow you find distressed sellers by numerous filters like delinquent tax records foreclosed property, REO properties, expired listings, property auctions, and more.

You can set up a personal "stacked lists" for targeted advertising via phone and mailers. This website helps to profitably find houses within a target market and directly contact people delinquent to improve your house flipping business.

3) Find Local Pre-Foreclosures

Finding pre-foreclosure properties on county websites is another effective strategy for discovering potential fix and flip deals. These websites often list properties that are in the pre-foreclosure stage, meaning the owners are behind on their mortgage payments but the property hasn't been foreclosed on yet. Here's how you can leverage this method:

1. Identify the County Website: Start by identifying the official county website of your area of interest. Remember, every county has its unique website and way of listing pre-foreclosure properties.
2. Navigate to the Appropriate Section: Look for sections such as 'Public Records', 'Property Records', 'Tax Collector', or 'Clerk of Court'. These areas often contain information about properties in distress.
3. Search for Pre-Foreclosures: Use the search function to find pre-foreclosure properties. You can generally search by address, owner's name, or parcel number. Some county websites may label these as 'Notice of Default' or 'Lis Pendens'.
4. Analyze Property Details: Once you've identified potential properties, analyze the details. Look for information like property value, outstanding debts, liens, and the status of the property.
5. Sign Up for Alerts: Some county websites offer email alerts for newly listed pre-foreclosures. If this feature is available, make sure to sign up so you'll be notified about potential deals immediately.

As with any real estate investing strategy, due diligence is crucial. Always verify the information obtained from county websites. Consider consulting with real estate professionals that obtain a real estate license to ensure a sound investment decision.

4) Use Social Media for Facebook Groups

1. Leverage an Online Marketplace: Facebook Marketplace has emerged as a popular platform for selling properties. You can use the search function to look for properties in your desired area. Look for properties that are listed at below-market prices, as these might be properties that wholesalers are trying to flip. Remember to be discerning, though - not every property listed below market value is a good deal.
2. Join Facebook Groups: There are numerous Facebook groups dedicated to real estate wholesaling. These groups can be a great source of leads, as wholesalers often post properties they're looking to flip. You can use the search function within the group to find posts related to your specific area of interest.
3. Engaging with Wholesalers: Once you've identified potential properties, engage directly with the wholesaler. Ask questions to gather more information about the property, and if things look promising, arrange a visit to inspect the property.
4. Negotiate: If you're satisfied with the property after inspection, negotiate with the wholesaler. Remember, the goal is to buy the property at a price that allows you to make a profit once it's renovated and sold.
5. Set Up Notifications: Last but not least, set up notifications on Facebook so that you're alerted whenever a new property is listed on Marketplace or in your groups. This will allow you to act quickly and snap up good deals before they're gone.

5) Join a Real Estate Meetup group

Joining a Real Estate Meetup group is another excellent strategy for expanding your network and finding properties to flip. Here are some steps on how to proceed:

6. Find Relevant Meetup Groups: Use the search engine on Meetup.com to find real estate groups in your area. Simply type in "real estate" or "property investing" along with your location to find a list of relevant groups.
7. Join and Attend Meetings: Once you have identified a group that matches your interests, join it and make sure to attend the meetings regularly. These gatherings are a goldmine of knowledge, experience, and potential leads. You could meet wholesalers, agents, or other investors who might have properties suitable for flipping.
8. Be Active and Engage: Don’t just attend – participate! Join in discussions, ask questions, and share your experiences. The more active you are, the more people you will connect with and the higher your chances of finding great deals.
9. Build Relationships: Remember, real estate is a relationship-based business. Take the time to build solid relationships with other members. This can include a hard money lender that provides you the loan for flipping foreclosed properties.
10. Set Up Alerts: Finally, set up alerts for new Meetup events or discussions within your group. This way, you can stay informed and take immediate action when opportunities arise.

Using these strategies, a Real Estate Meetup group can become a valuable resource to meet with other local professionals that can support your house flipping endeavors.

Conclusion

In conclusion, navigating the world of real estate flipping can be complex, yet incredibly rewarding when approached strategically. Leveraging the right resources could put you ahead of the competition by finding deals fast.