How To Find Cheap Houses To Flip In 2023 (Fast & Profitable)

Real estate ownership is part of the American Dream. While providing a financial and physical harbor in a chaotic world, one’s home has also been one of the best ways to earn a consistent return on investment.

The real estate market in the United States had a home value in 2021 that exceeded $43 trillion. To give some perspective, this equals the combined value of both the U.S. and Chinese global economies.

Real estate has provided decades of investment returns because of the inherently limited nature of land and property. This is why it’s valuable to learn how to find houses to flip or hold long-term.

Real estate investments continue to evolve, often providing many profitable opportunities for those who know where to look and how to invest. Technology has flipped the real estate market on its head – with the results of these advancements still being sorted out by the market.

According to ATTOM Data, in 2021 –

• There were 323,465 flips of condos and single-family homes, which was the highest in fifteen years.
• The flips in 2021 represented 5.5% of home sales in the country.
• The 2021 number of houses flipped represented a 26% increase from the previous year.
• Flipped properties generated a typical gross profit margin of $65,000 – equal to a 31% ROI compared to the original purchase price.

If you are seriously looking to learn how to make money flipping homes, it often begins with a deep dive into the local real estate market – one in which you are likely to have the most knowledge. As a result, if your area of interest is relatively affordable, it is a great place to start looking for cheap houses to flip.

However, if you happen to live in a pricey area, you may want to consider virtual wholesaling in another market.

The following guide offers a list of viable options to use in your quest to find cheap houses to flip.

• How To Find Houses To Flip In 2022?
• What’s The Best Way To Find Houses To Flip?
• How To Find Houses To Flip On Zillow?
• How To Find Distressed Properties To Flip?
• How To Find Cheap Houses To Flip?
• How To Find Investors To Flip Houses With?
• How To Find, Fix, And Sell Houses For Profit?
• Final Thoughts

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*Before we begin our guide, we also invite you to view our video on How To FLIP A HOUSE For Beginners (Step-by-Step). Host and CEO of Real Estate Skills, Alex Martinez, & Stan Gendlin share how to flip a house from start to finish as a beginner! 

 

Together, Alex & Stan have completed over 1,000+ house flips. What you learn in this video will give you the confidence and guidance to successfully complete your fix-and-flip project!

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How To Find Houses To Flip In 2022?

The following offers a list of viable options to use in your quest to find cheap houses to flip:

Leverage The Internet & Real Estate Apps

Real estate mobile app developers have created various helpful applications to aid house flippers in their quest for a new property to flip.

Mobile real estate apps are large databases that contain information about various houses, apartments, and other commercial properties. Their power is derived from the ease of use and the many search features that can be filtered by square footage, property location, lot size, or the number of bedrooms, among others.

Real estate apps’ popularity has soared over the past two decades. According to the 2021 NAR Tech Survey, the use of an online tool is now used across generations in the real estate industry - 

Source

 

Redfin

Redfin is a mobile app and website that offers access to up-to-date property information that is updated every five minutes. The Redfin App offers various filters to narrow down and save search results.

Zillow

Zillow, which now owns Trulia, is recognized as having the most U.S. real estate traffic on the internet. Its mission is to empower its users with the knowledge and data they need to learn how to find a house to flip.

PropertyRadar

This mobile app offers access to an amazing array of enhanced data and comprehensive information (residential and commercial) extracted from public records. PropertyRadar helps with off-market deals, with built-in skip tracing – in a matter of seconds.

Craigslist

Craigslist, which is now available in seven languages, is a digital classified ad website. Certain percentage of homeowners have, and always will, choose to market and sell their own home, using sales conduits like Craigslist. There are various reasons sellers make this choice, but it is mostly a path to a home sale without paying large commissions.

Facebook Marketplace For Real Estate

Like Craigslist, Facebook is a widely-used website with various offshoots – including its marketplace. Homeowners who use these selling resources often want to sell fast and are, therefore, highly motivated. Often in these deals, cash is king.

MLS – The Multiple Listing Service

The concept of a “multiple listing” can be traced back to 1907. A year later, the National Association of Real Estate Exchanges (which ultimately morphed into the National Association of REALTORS®) approved the MLS for all licensed real estate agents. This online database allows for searching based on price, neighborhood, as well as home features.

While the MLS may appear to be a large database of property information, it is really a conglomeration of approximately 580 regional databases. MLS is organized by territory or region and offers cooperating brokers a consolidated database of property info.

FlipScout

FlipScout is a user-friendly search engine designed with property investors that is a good fit for rental property investors or house flippers. The service is free and offers targeted searches to find investment properties. Flipscout can even help calculate renovation costs, the potential Return on Investment (ROI), and anticipated rent – all in a matter of seconds.

Your Local Neighborhood – FSBOs & More

Sometimes the best method to find a cheap house to flip is to simply drive the neighborhoods in which you have an investment interest. By finding those homeowners who use a handwritten yard sign, you can connect with motivated homeowners – and get the opportunity to view the house!

In addition, FSBOs (For Sale By Owners) are often ready to make a real estate deal, which creates a bit of wiggle room with regard to the sale price – simply because there are no real estate commissions or fees.

Real Estate Software Options For House Flippers

DealMachine

Deal Machine software offers a variety of plans and subscriptions to meet the needs of real estate market house flipping professionals. This house flipping software is one of the highest-rated lead-generation offered on the marketplace.

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Read Also: DealMachine Review: Is It Worth It?

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PropStream

PropStream’s nationwide property information is curated data based that is sourced from multiple county public records, private sources, and MLS records. PropStream provides important, critical data for over 150 million properties. This includes tax information, property details, history of mortgages, and nearby comps, to name a few. 

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Read Also: PropStream Review (2022 Edition) | Real Estate Skills

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Google Maps

Google Maps is a great, easy-to-navigate search engine built off of Google’s GPS info. Google Maps offers access to available homes for sale – including property details and listing prices.

ListSource

ListSource is a secure property source engine that provides powerful targeted direct marketing of demographics-based leads. ListSource has access to more than 130 million properties within its database, search criteria that include city, county, zip code, or state, to name a few.

Foreclosure.com

Foreclosure.com is recognized among the largest provider of distressed properties listings, with more than 1.7 million related to pre-foreclosures, foreclosures, tax liens, bankruptcies, short or sheriff sales, plus fixer-uppers, among others. Note, however, that this is a site that requires a paid membership – although there are several plans – even weekly.

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Read Also: Foreclosure.com Review (2022 Edition)

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Hubzu

Hubzu is an online auction platform for real estate foreclosures and REOs. Hubzu allows investors to bid online on REOs held by major U.S. financial institutions.

Real Estate Agents & Brokers

Real estate brokers, agents, and Realtors are great working business partners for property flippers. These real estate professionals spend their workdays connecting with home sellers and delving into current market data and conditions, which often makes some of them an expert with a wealth of information.

By interfacing with savvy professionals who may have a profound track record or specific market knowledge that can be of great help, a flipper looking for a cheap house to flip may find the deals making their way directly to you.

Leverage Your Existing Professional Network

Use existing social media accounts to get your professional message posted to current friends and colleagues.

Real Estate Wholesalers

Wholesalers have an objective to find homes priced below market value. Wholesalers then contract for the investment or rental property and find an alternate end buyer (who is often a cash buyer) who wants to own the property.

There are two primary closing strategies –

• The Assignment of Sale
• The Double Close – has higher closing costs.

A purchase through a real estate wholesaler may not be the most cost-effective method, but it can be quite efficient – which has value in saving time.

Foreclosure Auctions

Foreclosure auctions are recognized to be among the fastest way to sell a property – be it a foreclosed home, or a home sold through a probate proceeding. These types of sales are designed to accelerate the process that results in a new owner.

In the case of lenders holding REO properties, an auction allows them to offload an asset that requires ongoing expenses. 

Pro-tip – When purchasing a home at an auction, you agree to an as-is purchase without an inspection. This a business risk must be accounted for in your analysis.

REO Properties

Properties that are not sold at auction become the possession of the lender and are recognized as bank assets known as Real Estate Owned properties (REO).

Properties include –

• Fannie Mae
• Freddie Mac
• Chase Bank
• Bank of America, among others.

Short Sales

Short sales allow homeowners to sell their homes for an amount that falls short of the outstanding mortgage balance. As a result, short-sale sellers are usually highly motivated and already know they must sell the home at a discount.

                                                                                                                                      

What’s The Best Way To Find Houses To Flip?

For many reasons, accessing the local multiple listing service (MLS) is likely to offer the most up-to-date and accurate database of currently available rental and investment properties.

The MLS – which is the king of property databases, allows flippers and wholesalers to focus on the property’s evaluation and the submission of a reasonable and viable offer.

Contrary to popular belief, the MLS gives investors the highest ROI on their time and money over traditional deal-finding methods which require spending thousands upon thousands of dollars in marketing every single month before submitting a single offer.

It also helps first-time flippers and beginners avoid potential scams since MLS listings are 100% legitimate.

Pro Tip: Having an effective exit strategy is an important component of your overall investment strategy. There are no ‘correct’ ways to flip a house except one that offers a viable exit route.

                                                                                                                                      

How To Find Houses To Flip On Zillow?

Zillow is the most widely used online residential real estate website. Its mission is to connect sellers with potential buyers, investors, or renters across the country.

When searching through available listings, focus on those properties with prices below market value – because there is usually a reason for the discounted sales price.

The following offers a few of the search criteria and filter options -

Lowest Priced Homes

This search offers a listing of homes, with the lowest prices shown first.

Keyword Searching

Search the database using specific keywords that may find potential investments. These may include flip, fixer, investor, needs TLC, developer, etc.

Older Listings

The older listing search criteria display those homes that have lingered on Zillow or the market. It is best to sort from oldest listing to newest.

Zillow Foreclosure Center

Most consumers are familiar with Zillow and its remarkable and comprehensive database. However, Zillow offers some unique features that benefit house flippers in the Foreclosure Center.

Zillow For Sale By Owner

Zillow’s database of properties offers for sale by the owner properties.

                                                                                                                                      

How To Find Distressed Properties To Flip?

A property can be physically or financially (or both) distressed. Many distressed or poorly maintained homes are in disrepair because the owner is (or is at risk) of falling behind on mortgage payments far enough for the lender to file a lis pendens.

Driving For Dollars

Driving for dollars is simply a phrase that describes one of the many ways to find cheap houses to fix and flip near your neighborhood. Focus on obvious signs like an overgrown yard; notices posted, broken windows, etc. Note the address and start investigating the property online.

Searching On The MLS And Other Listing Sites

Although access to the MLS is for licensed agents, a property listed on MLS is often a great opportunity for flippers – mostly due to the incredible exposure it offers. All that is required is to work closely with a licensed real estate agent with MLS access. MLS is a great resource because –

• It offers one place for all listings.
• It tends to have a lot of relevant information.
• The MLS can be searched based on a pertinent keyword.

Pre-Foreclosures And Foreclosure Auctions

As noted above, homes in a pre-foreclosure or foreclosure status tend to be priced below market and owned by motivated sellers. The US Department of Housing and Urban Development (HUD) offers a comprehensive list of all properties for sale.

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Read Also: Wholesaling HUD Homes: The (Ultimate) Guide

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Tax Delinquent Properties

A house with delinquent property taxes is simply one where owners have failed to pay assessed taxes that have been levied. Jurisdictions have several legal options for those properties that have delinquent taxes –

• Place a Tax Liens On The tax-delinquent Property.
• Initiate Legal Proceedings To Acquire the Property’s Deed.

The minimum bid in a tax deed auction is typically the total of the taxes and any accumulated interest or auction fees. The winning bid receives the right to repay the lien or to foreclose on the property.

Code Violation Lists

Local, state, and county governments set forth standards to ensure homes are safe and offer sanitary living conditions. When a property fails to meet established building codes, it will be flagged with a violation – which is given at various levels depending on the severity of the violation. It can, at times, include the condemnation of a property.

Violations may occur for safety reasons, the property is an eyesore, or used illegally, to name a few. When a property has a building violation, the code enforcement representative will mark the property with a sign on the front door or window. 

Property owners facing a code violation are often motivated to sell if they don’t want (or don’t have the funds) to remedy the violation. This technique can be combined with the Driving for Dollars, as properties tagged for violations are often available online.

Pro-Tip - Bring the code enforcement office a dozen donuts once in a while, and get to know the professionals who work there. They may help by notifying you of upcoming zoning changes or a recently reviewed neglected property.

                                                                                                                                      

How To Find Cheap Houses To Flip?

The digital real estate landscape has made it infinitely easier to find a cheap home to be flipped for a potential profit. The cheapest homes to flip will likely be listed on MLS or to avoid a real estate commission – one of the free-to-list sites on the internet.

Of course, working in an affordable marketplace will help. With the 2021 median U. S. home price of $346,900, the following offers some of the more affordable MSAs (Metropolitan Statistical Areas) markets or states in the country in which a flipper may find opportunities –

• West Virginia - with a median sales price for single-family homes of $130,625.
• Ohio - with a median sales price for single-family homes of $156,343.
• Missouri - with a median sales price for single-family homes of $190,859.
• Michigan - with a median sales price for single-family homes of $192,104.
• Kansas - with a median sales price for single-family homes of $220,000.
• New Mexico - with a median sales price for single-family homes of $290,000.

                                                                                                                                      

How To Find Investors To Flip Houses With?

The world of real estate finance is defined by several subsectors. There are commercial, residential, and niche lenders, among others. Niche lenders are often private investors (people or companies) looking to fund a promising flip or rental investment property.

Niche lending in the flip market provides necessary financing, but at terms that are generally more expensive than residential lending. The higher interest rates and closing costs are due to:

1. a lending market that does not have nearly the oversight of the residential market, and
2. a flip or quick funding deal tends to be riskier, so the added fees compensate the lender for the added risk.

Real Estate Investors Association Meetings (REIAs)

A REIA is a group of investors who meet to help other members interested in real estate investing. As a networking opportunity, a REIA is a great way to learn market specifics and nuances from professionals who have negotiated the real estate investment path. Meetings may include members who are active flippers or just those who wish to participate passively.

Online Communities, Like Facebook, Reddit, etc.

Online real estate investment communities are also a great place to network and find helpful advice and guidance from more experienced investors. These online groups post listings but also offer meetups with sellers or other investors. Also, consider -

• Networking with realtors and other investors
• Calling rental listing ads to connect with landlords
• Driving for Dumpsters – which is just about looking for renovations or rehabs locally

                                                                                                                                      

How To Find, Fix, And Sell Houses For Profit?

To become a successful property flipper, you need to refine your skill at evaluating a potential flip investment – using online and offline tools and techniques. In general, real estate comparable properties (homes listed or sold – known as comps) offer a great benchmark for the subject property.

Most property flippers use the 70% Rule – which says an investor should not pay more than 70% of the After Repair Value (ARV) – MINUS the cost to rehab the home. The ARV is the amount that the property could bring after it has been rehabbed. Here is an example for clarification -

After-Repair Value (ARV) ✕ 70% − Estimated repair costs = Maximum buying price.

If a home’s ARV is $300,000 and it needs $50,000 in repairs, what would the maximum price a property flipper would consider? The simple calculation would be –

1. $300,000 * 70% = $210,000
2. $210,000 - $50,000 = $160,000 – the maximum price a flipper should pay for a potential investment with these specs.

                                                                                                                                      

Final Thoughts

The underlying business objective and bottom line for a property flipper is to find a discounted property, offer a small down payment, make some basic repairs (or bring it up to code) and then offer it as a resale at a higher price.

The secret really lies in the investor’s capacity to flush out a ‘diamond in the rough’ and to envision the potential of the home beyond its current condition.

For a detailed, step-by-step program to find and flip your next house in 45 days or less, watch our brand new training on wholesaling and flipping houses from the MLS! See you there!