How to Find a Good House to Flip

If you are looking to make money in the real estate market, flipping houses is an excellent way to do it. But one challenge many house flippers encounter is finding the right homes to fix up for a profit. If you are convinced that your next real estate investment should involve flipping houses, here is how to locate distressed properties worth sinking money into.

Flipping houses is relatively easy when you know what you're doing; it's finding homes to flip that's often the challenging part, so here's how to tackle it.

TALK TO WHOLESALERS
Wholesalers are in the business of finding rehab properties, putting them under contract, and then finding a new buyer who will execute the house flip. The buyer will essentially take a wholesaler's place in the agreement, paying a fee to the wholesaler for being the middleman. Although this is not the most cost-effective method of making a property purchase for a house flip, it can be very time efficient and may save money in the long run.

NARROW DOWN A MARKET
Landing on a target real estate market will help you narrow down your choice for flipping houses. It could pay to focus on neighborhoods that are up and coming but not yet the most desirable. In that way, you are likely to spend less money on a home purchase and property taxes while on it.

LOOK AT AUCTIONS
Homes that are put up for auction are those that have been foreclosed upon. The benefit of buying homes at auction is that you can generally get away with paying less money for them. The downside? You'll usually need to come up with that money in cash form, as auction homes generally aren't financed via a mortgage. If you don't have the money to buy one of these homes outright, you may need to resort to a hard money loan or find a real estate investing partner in putting up that capital. Homes sold at auction are often snatched up on the spot, which means you may not have time to look at the property before buying it.

Generally speaking, you are better off focusing your homes' efforts in bad shape cosmetically but are structurally sound and do not have any significant wiring or plumbing issues.