One of the best ways to find low-cost properties for house flipping is to look for them in distressed areas that have a greater number of foreclosures, as noted by Forbes. Foreclosure sales are conducted by lending institutions as a way to recoup the portion of a loan that remains unpaid, which can represent an amount which is below the property's actual market value. Another method that can be used to connect with low-cost properties is to develop contacts with local attorneys that specialize in divorces and estates, as recommended by Bankrate.Continue Reading
Government agencies seeking to collect on an unpaid tax debt auction off properties that can be purchased at less than their market value, and checking online listings for public tax lien auctions can be a good way to find properties that can be purchased at a low cost. Investors should bear in mind, however, that factors such as the home's location can play a role in how easy or difficult it will be to flip the property over to a new owner and make a profit, as noted by BankForeclosuresSales. An economically impoverished neighborhood or a poor school district can have a detrimental effect on a house-flipper's hoped-for return.
The amount of repair work needed to ready a home for sale is an additional factor. Minor cosmetic repairs may not detract too much from the investor's resale profit margin, but repairs needed for bathroom and kitchen areas can become costly. Houses that are in need of extensive and costly repairs should be avoided, as advised by Forbes.Learn more about Real Estate