The 2 Reasons You’re Not Finding Profitable Fix and Flip Deals
It happens at least 2-3 times a week.
A text message will appear on my iPhone. It’s from one of the handful of Realtors we work with in Phoenix or Milwaukee. Or, it’s from a wholesaler in our network.
These messages are brief and to the point. Here’s an example of one I just received last week from a Realtor we do a lot of business with in Phoenix:
Do you have any money for a new fix and flip project? Would need mid 200’s to buy, plus fix up. Meeting seller tomorrow. He just wants to sell to an investor.
Of course, my answer was yes.
The next morning I met this Realtor at the property. I’d already done my research on the after repair value of the home. I just needed to see it to figure out the rehab budget and scope of work. With that information I could calculate our offer price.
I quickly determined that with an after repair value of $345,000, and a rehab budget of $45,000, there’d be a gross margin of $55,000 in this property.
After about 30 minutes inside the house, I gave our Realtor a bottom line number of $245,000 with a two week closing. By the end of the day, he told me the seller would accept my offer.
Why Aren’t You Finding Deals Like This?
I didn’t have to put out any bandit signs to find this deal. Or, run an expensive direct mail campaign.
And, I didn’t have to compete against other investors at an auction for it.
This property, like all the deals we get in Phoenix and Milwaukee, was practically served to us on a silver platter. We get Realtors and wholesalers calling us first, before any other buyers.
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These same Realtors and wholesalers would call you too. But, they’re not because:
You’re not decisive.
You don’t follow through.
You’re Not Decisive
If a property with a $100,000 spread, in a red-hot market like Phoenix, fell into your lap today how soon could you make a decision to buy it?
How much time would it take you to run comps, estimate the rehab budget and write up an offer?
If your answer is more than 12 hours then guess what?
You can kiss the deal goodbye.
You Don’t Follow Through
And, if you do get a deal like this under contract and into escrow, can you actually close it?
Or, will you back out because you got cold feet?
Maybe you need to cancel because you couldn’t come up with the cash required to purchase the property?
Well, don’t expect that Realtor or wholesaler to ever bring you a juicy deal again. You’re now on their “flakey buyer list”.
The Truth About Finding Profitable Fix and Flip Deals
The professional Realtors and wholesalers in your real estate market want to work with investors than can perform, and perform quickly. They want to do business with problem-solvers, not problem-creators.
Nobody likes a wishy-washy distressed property buyer.
There are deals to be had in any real estate market. Make it your mission to learn how to quickly evaluate a property’s value and rehab budget. You may have to analyze 15-20 deals, or more, to master this part of the process.
Then, once you do…
Decide to buy, or not, fast. And always follow through.
Do these things and you’ll be amazed at how many profitable fix and flip deals will start coming your way.