House flipping is a form of investing in real estate. During this process, investors purchase a home for prices significantly below market value and sell the home for a profit. Flipping a house presents the opportunity for investors to earn astronomical profits, with the average profit around $74,000. To make the highest profit possible, investors need to find distressed properties priced below market value. From there, you’ll purchase the property, make the necessary repairs, and sell it for a profit.
Although flipping houses appears straightforward, it can be costly and time-consuming if you’re not familiar with the process. The first challenge you will face as a beginner real estate investor is finding houses to flip. While distressed properties appear attractive to real estate investors, it’s vital that you know what to look for and where you can find them. Let’s discuss how you can spot a property in distress, along with a few ways that you can find what you’re looking for.
What Makes a Property Distressed?
Simply put, a distressed property is real estate that the property owner is unable to maintain. In many cases, they are facing financial difficulties that prevent them from making mortgage payments. Some distressed properties are in a pre-foreclosure status, while others are undergoing the foreclosure process.
However, a distressed property could also be owned by a bank or another government agency. Other distressed properties are simply in terrible condition. Investors may also consider a property distressed when the original owners are unable to proceed with renovations, and the owner needs to sell the property quickly.
Where Can I Find Distressed Properties?
Finding distressed properties isn’t as challenging as you might think. You just need to know where you can find the best deals. While some investors are successful using only one of these techniques, most combine several strategies for the best results. For example, you may have a cold calling team reaching out to potential leads while you search for investment opportunities at nearby auctions. Beginner investors should leverage every resource at their disposal to expand their house flipping business
One of the best ways to discover properties suitable for flipping is at an auction. Typically, houses are put up for auction because the property owner needs to sell them as soon as possible. Sometimes, a house is put up for auction when the property is undergoing foreclosure, or the homeowner has passed away.
Auctions present great opportunities for real estate investors. At most auctions, sellers are willing to accept an offer well below the market price to quicken the transfer of ownership. However, risk always accompanies opportunity. The primary issue that investors face when purchasing a home via auction is that they cannot inspect the property before completing the purchase. If there are electrical issues or flooring problems, you will not realize this until the transaction is confirmed, so be aware that there is always the possibility that an auction purchase requires in-depth repairs.
2. Foreclosure Databases and Classifieds
As you’re searching for houses to flip, you may find the opportunity that you’re looking for in foreclosure databases. When an investor purchases a foreclosed property, they’re buying a home that the bank repossessed. Typically, foreclosures occur when the person who borrowed the house missed one too many mortgage payments. Foreclosed homes sell well below market value because it costs banks money to keep them. Naturally, they want to sell the house as soon as possible.
There are several ways that investors can find foreclosed properties. When you’re just getting started, consider scrolling through Zillow to find foreclosed properties for free. There are also foreclosure listings on the Federal Housing Administration website and on the Department of Housing and Urban Development.
3. Driving for Dollars
Another effective strategy to find and flip houses are “driving for dollars,” which is exactly how it sounds. To get started, you’ll need to research neighborhoods in your area to see which ones are likely to have profitable investment opportunities. Once you’ve chosen the right area, drive through neighborhoods that appear promising to find houses that could be suitable for flipping.
There are multiple ways to drive for dollars, but in most cases, investors drive slowly through neighborhoods and look for houses that appear in need of repairs. Keep a close eye out for any signs of neglect, deferred maintenance signs, or signs that the owner has abandoned the house. If you notice overgrown lawns, faded paint, or letters overflowing from the mailbox, consider contacting the owner to see if they’re interested in selling the property.
4. Cold Calling
The best way to find houses priced below market value is by contacting sellers directly. Although you may be able to find homes to flip using different tactics, cold calling offers house flippers unique benefits that other methods can’t match. With cold calling, potential clients have the opportunity to form a personal connection with your company, which increases the likelihood that you will find more significant investment opportunities through word-of-mouth marketing.
However, calling every potential seller is a tedious process, so it may be in your best interest to outsource these duties to a team of professional cold callers. If you partner with experienced cold callers, they will learn more about your house flipping company and the type of sellers you’re interested in attracting. From there, they’ll create a script that explains the benefits of working with your company. When a prospect appears interested, cold callers will send qualified your way so your company can close the deal on a lucrative investment opportunity.
Find Sellers and Buyers with Call Motivated Sellers
To start building your network, acquiring properties for your portfolio, and turning a profit, enlist the assistance of Call Motivated Sellers. Our team of professional cold callers saves you time and effort by vetting leads for your team. Informing interested buyers and sellers about the benefits of your wholesaling services, we’ll use our expertise to warm up leads, find the best prospects, and set your sales team up for success. With cold callers on your side, you can leave the hard work of lead generation to us and focus on other aspects of your business.
Call Motivated Sellers is an American-based real estate cold calling service that can help raise your sales and provide hot leads year-round. We have years of experience cold calling in the real estate industry, along with access to the best information for buyers, sellers, and agents to help you close more deals.
If you’re ready to leverage the power of cold calling for wholesaling, Call Motivated Sellers is here to help. To learn more about the services we offer, just contact our team today!