As a fix-and-flip business, you must be looking for the best deals on homes in order to make a decent profit on your renovations. Buying a foreclosed home is a great way to achieve this. To make the best decisions when finding a deal on a foreclosed home, use the following tips.
Find a Real Estate Broker or Lender
What kind of budget are you looking to work with? Get your finances in order before setting out to find a home that is foreclosed. Acquire information on private real estate loans so that when you find the perfect house, you can start the loan application process immediately.
Observe the Neighbors and Neighborhood
You must ensure that you purchase a home in a friendly, well-maintained neighborhood. When visiting the home, observe the surrounding area to see how the neighbors are acting. You might purchase the house for a great price only to find out the neighbors are horrible, making it even more challenging to sell the home after the fix and flip.
Look for Red Flags
Never buy a property with red flags such as liens, angry previous owners, or elements not being up to code. The best way to spot red flags early on is by hiring an inspector to look at the physical attributes of the interior and exterior of the home. If any problem that arises before you buy the foreclosed home sounds like it will eat away at your fix-and-flip budget, move on to find a different house to purchase.
Understand What Needs Improvement
What inside or outside the home will need a significant amount of improvement? Most of all, consider your budget—will you have room to do all of the necessary renovations without overspending? Aside from the budget, are the types of renovations you need to complete within you and your employee’s skill set? Create a clear picture of the work that needs to be done on the house before making a final decision.
Bid the Higher Price (in Certain Scenarios)
The housing market can fluctuate, so pay attention to how fast homes are selling around the foreclosed house. If properties are selling fast and you see no problem with flipping the home, put in the highest bid you can manage to ensure a deal. You may need to bid higher in these scenarios because many other buyers are also attempting to purchase the home.
Foreclosed homes can make for great fix-and-flip projects because the current owner of the property is typically a lender who seized the home. They want a quick turnaround on the home for a lower price. Dig around while inspecting the house so you are not blindsided once you start renovations. Be mindful when purchasing and always keep the big picture at the forefront of your mind when selecting a home.