After all your flipping prep work, your first step is to generate leads on your road to finding houses to flip. Unfortunately, not all leads will end in you buying a property to be flipped. Many leads will be dead ends for various reasons including (but not limited to) the lack of a seller’s motivation, condition of property, and even competition. Because this is a numbers game, you need to define how many properties you want to flip each year or month and then how many leads you will need to generate properties to make offers on. The following techniques, when used consistently, should allow you to generate enough flip leads which in turn will allow you to find (and make offers) on properties to flip:
- Prospecting-The following tools will generate leads on potential houses to flip. Once you generate the lead, use the county’s on-line property tax system to find the owner. Call them or send them a letter asking if they are interested in selling and that you can close quickly.
- Use the MLS or a Realtor to find properties that are below the average price range for your target neighborhood. Although it is not a perfect statistic, use a price per square foot as a rough way to find leads on properties. Also, look for keywords in the listings that say: needs TLC, fixer-upper, As-Is. Additionally, review properties that have been on the market for an extended period of time.
- Drive or walk around your target neighborhood. Look for houses that have uncut grass or are vacant and/or boarded up. Properties that also appears to need exterior work may be leads.
- Sometimes desperate sellers will attempt to sell the property themselves first, before using a Realtor. Check the classifieds in the local paper and Craig’s List for your area.
- Check the foreclosures listings in the newspaper. I do not recommend buying the property at the sheriff sale, but contact the sellers to see if you can help them out of a bad situation. Otherwise, simply make a note of what properties are going into foreclosure and watch for them to become available (probably on the MLS).
- Advertising can be an effective technique to generate qualified leads as people are calling you to discuss their property/situation. Small “bandit” signs at intersections and boulevards is a highly effective technique that many national firms use. You can also create letters or postcards and mail them to your target neighborhoods calling the recipient to call you if they need to get out of their house quickly. These can be an easy way to find houses to flip.
- Networking involves connecting with as many people who you can find that many have knowledge of a lead on a house that needs to be rehabbed. These may include Realtors, contractors, neighborhood residents, and other investors. One great source is to connect yourself with attorneys that handle estates. Often the family members are not interested in going through the process of selling or fixing up their relative’s home and just want it taken off their hands. Many times these will be homes that have been neglected for years by an aging owner.
Even once you start your first flip, do not turn off your lead generation process. If you intend on continuing to do house flips, you will want to always have leads in your pipeline. The above techniques will not only help you in finding houses to flip, but they should also help you understand your target neighborhood better.