How to Find House Flip Deals

There are two distinct ways to find deals in today's market:

'On-Market' refers to deals that are listed on the MLS (Multiple Listing Service).

'On-Market' deals are posted online and are readily available to any buyer that has access to the MLS.  Since 'On-Market' deals are so easily accessible, there is much more competition.  If you are shopping for deals on the MLS you are competing against other investors, but you are also competing against 'retail buyers' as well.  This obviously drives up prices and makes it much more difficult to find deals that can make a solid profit.

​'Off-Market' deals refer to deals that cannot be found on the MLS marketplace.  These deals are much harder to find, but have less competition so you can buy properties at a discount.  Finding 'Off-Market' deals requires more 'hustle', but often result in the best deals that provide the most profit potential.

First, we will discuss the MLS and how it can be used to find deals into days market, and then we will discuss the most common and successful strategies to find 'Off-Market' deals.

As discussed previously the MLS is the online listing marketplace that sellers use to list their properties for sale.  

If you are selling your property, you absolutely want to list your property on the MLS because that is where all of the retail buyers go to shop for properties.  

However, if you are looking for potential deals, the MLS is very competitive, and you will probably find it difficult to find rehab deals that can generate a solid profit.

​Back in 2008 to 2012, the market was over-saturated with foreclosures from the financial crisis, so you could easily find distressed properties and rehab deals at a profitable price.

​Flash forward to today's market and most of the foreclosure inventory has dried up.  Today's market inventory cannot keep up with buyer demand and properties are receiving multiple offers over asking price.  Obviously, getting in bidding wars with other investors & retail buyers and over-paying for property is not a recipe for flipping success.  Remember, you make money when you buy!

'Driving for dollars' is one of the best strategies for finding deals, but it takes time, effort & gas money.

'Driving for dollars' is the process of driving around neighborhoods and searching for properties that looked distressed or abandoned, that could be owned by a seller that is motivated to sell.

Here are some signs you should look for:

Once you find a property that qualifies, leave a business post card at the door, or jot down the address and write a letter to the property owner.  You can generally find the property Owner's Name on the County Recorder's website.  From there you ca research their contact information.

Again, this strategy takes time, effort & money, but in order to find 'off-market' deals that nobody else knows about, you will have to do things that nobody else wants to do.

Networking at Real Estate Investment Group meetings can be a great way to meet agents, wholesalers & even other rehabbers in the market that can be a potential source of leads.

Get on Facebook.com or Meetup.com and search for local Real Estate Investment groups that you could join.  At REIG meetings or in the online Facebook/Meetup groups investors you will often find wholesalers agents sharing information on prospective rehab deals.

In my experience, our local REIG is a tight-knit group of investors that want to help the community succeed and are willing to share their knowledge, experience and strategies with the group.  'Talk shop' and network with other rehabbers & flippers in your area, and they may be willing to share their insider strategies of how they are finding deals.

Local agents can be another source for potential 'off-market' rehab deals.

In situations where a seller has a distressed property, are facing foreclosure, a divorce or death in the family, the seller often doesn't want to deal with the hassle of listing their property on the MLS.  In these situations, the seller may contact a real estate agent to negotiate an off-market purchase with a local rehabber that can offer cash for the property and close quickly.

A Wholesaler is a local investor that specializes in finding distressed, 'off-market' deals.

The benefits of utilizing a wholesaler is that they are doing all 'hustle work' to find the 'off-market' deals.  They are utilizing their time, their resources and marketing dollars to find the 'off-market' rehab deals for you.  For their efforts finding the deal, they charge a small wholesaling fee (generally 5% of the Purchase Price).

Perform a Google Search of local wholesaler's in your community (ex: Kansas City Real Estate Wholesalers) and Google should be able to find a list of the major wholesalers in your area.  Most wholesalers will have a website setup with a list of current inventory and give you the option to subscribe to their mailing lists.  You can also find wholesalers at your local REIG meetings, Facebook Groups or Meetups.

Find out which wholesalers work in your 'farm market' and introduce yourself, and discuss your buying criteria for your rehab deals.

Foreclosure, Estate or Private Auctions provide good opportunities to buy properties at discounted prices.

Your first step to buying a property at a Sheriff Sale is to do your research.  Most foreclosure auction lists are published by the county several weeks before the sale in the newspaper or on their county courthouse website.  If the Sheriff Sale information is not readily available online, contact your local town or county courthouse for more information.

Once find the list of Sheriff Sales in your local county, identify the properties  in your market that fit your buying criteria and go visit the property in-person to see the condition of the property.  Unfortunately, due diligence on Sheriff Sales can be difficult because you can only view the property from the street and won't be able to inspect the interior condition.  If possible glance in windows, or try to get the 'inside scoop' from neighbors.  When in doubt, just assume the interior of the property is a full gut.

Before auction day, decide the highest you are willing to bid for the property.  When a bidding war occurs, don't get emotional and overbid for the property.  Stick to your highest bid price, and if you get outbid, walk away and move on to the next property!

Estate Auctions are used to liquidate the assets of a family or an estate, generally after a death, but it can also be used due for downsizing, moving, divorce or bankruptcy.

Similar to Sheriff Sales, Estate Sales are generally advertised in the newspaper, but you should also check local Auctioneer's websites.  In fact, I would recommend you subscribe to your local Auctioneer's websites so you can get notifications of new Estate Sale events in your area.

The good thing about Estate Sales is that you will generally be allowed to walk the property to inspect the property's condition before the Auction, so you can perform a thorough analysis of the property to determine your highest bid.

Most auctioneers require the winning bidder to put 5-10% down on the purchase price as Earnest Money Deposit.  Also, be sure to check the auctioneers terms because they will generally charge a 10% 'Buyer's Premium'.  

​So if you bought a property for $100,000, your total purchase price would be $110,000!

Direct mail marketing involves sending postcards or mailers to homeowners in your market.

There are different list sources such as Listsource.com&Listhub.com  that provide lists of absentee owners, probates & pre-foreclosures.  

You can use these lists to send postcards and mailers sellers to generate leads.

Creating a website or landing page for your flipping business can be another great way to find motivated sellers, and establish credibility and authority in a marketplace.

You can create a basic website, using any 'drag-and-drop' website creator such as Weebly.com, Wix.com, etc.  Or you can use a real estate specific website builder such as Investor Carrot.

You can attract traffic to your website from a number of different strategies to ultimately close leads: