Last week, we met with 30 house flippers from across the Denver metro area for margaritas and a discussion on how to source the best flip properties in our current market. Fixters and Next Stage Properties’ CEO, Tom Hurford, shared valuable advice on how to find desirable, remodel-ready properties (even in a competitive market like Denver) and gave his thoughts on the kinds of people that you need in your network to make the process as smooth as possible.

Here’s what he had to say.

Question: As a house flipping expert, what are your top tips for sourcing lucrative properties?

When it comes to finding distressed or outdated homes in desired locations and with good structural bones, you can always do your own research through online sources such as Zillow, Redfin or the MLS (if you have access). You can also find fix and flip properties through attorney referrals and real estate agents.

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Question: How do I vet an agent or another referral?

In today’s market, you DO NOT want an agent who tells you to go look at properties on the MLS on your own. A great agent will tell you the purchase price and what a good offer is for a home within the parameters that you have outlined (ie. neighborhood, size, estimated renovation cost, etc.).

You DO want an agent who puts in the effort. A good partner does their homework, walks the property before you see it and proactively provides an overview of comparable properties. They will also ensure that they understand your criteria before they dive in.

Tom Hurford (Fixters CEO) and Emily Wallace (Fixters Events and Marketing Coordinator) discuss find the best fix and flip properties.Make it worthwhile for the agents, attorneys and all parties involved. Beware that in some situations up to 5 transactions are possible.

  • 1-2: The sale/purchase of the distressed property pre-renovation from the seller to the flipper.
  • 3: The purchase of a new home for the flip property’s previous owner.
  • 4-5: The sale/purchase of the flip property post renovation.

When it comes to managing these relationships, remember to communicate consistently and transparently. More information is always better.

Question: Next I was asked, what should flippers look for in fix and flip properties?

  • Before you look for a property, line up a list of General Contractors that could be appropriate for your project.
  • Use Fixters Evaluate software to estimate your renovation budget and timeline.
  • Use your realtor’s expertise to point out a property’s red flags.
  • Check out the location. Take note of needed updates to increase curb appeal.
  • Look for a good structure. Does the floor plan have a master suite? Does it have or can it have double sinks in the master bathroom? Is the closet space comparable to the neighboring properties?

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Question: What are good marketing methods for sourcing potential flip properties?

Our team has the most success with placing property marketing brochures in large real estate offices throughout our area. If we get a deal through that office, we give them title — which means more business for the both of us and a better, long-term business relationship. Once again, the best advice I can give is to build meaningful connections with trustworthy and hardworking people in the industry.

Another option includes working with wholesalers, direct mail marketing and auctions. We have not had much success with these last three. Primarily because the competition is too high.

Fix and Flip Real Estate Meetup of Denver, February 2018 meeting discussing how to source properties with Tom Hurford.Question: What does the market trend look like for the next 18 months?

There is low inventory on single family homes, but an increased demand for millennials looking for updated starter homes. Sourcing a property might be more difficult when it comes to research, but the sale will be worth your while. For this reason, we have become more aggressive when estimating After Repair Value (ARV). The market continues to support higher post-remodel sales costs.

Speaking of costs and money… everyone needs it to fuel their business. The stock market may not be as predictable as you’d like, and that’s where an opportunity for real estate investing can be a good option. In the event of a market lull, you can switch tactics to rent out your fix and flip property and create cash flow while you wait for the selling market to improve.

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Question: What do I do next?

Our next Denver Fix and Flip Real Estate Meetup will be on Tuesday, March 27. Fixters Funding Network Consultant, Tom Kelly and some of his colleagues, will join us to discuss house flip financing and funding. If you are in Denver and interested in securing a fix and flip loan or just want to know your options, join us!

If you aren’t in the Denver area, register for our free webinar on Tuesday, March 13 to learn about the funding options and coaching that Fixters provides our community.