How to Find Fixer Upper Houses the Conventional Way
There are many different approaches to find real estate deals such as fixer upper houses as an active wholesale investor.
Below, I will discuss what many real estate investment teachers will tell you and what they don’t want you to know.
One of them uses different property listing platforms and classified sites, such as craigslist, then contacting the sellers and making offers.
But before you go to these websites and search manually for deals, you usually predefine what kind of property will qualify as a profitable fixer upper deal for you.
Part of that work is also to determine the area or neighborhood you want to focus on.
The latter depends on how much buyer demand there is.
Because as a wholesaler, you want to flip the contract or the fixer upper property in the shortest amount of time possible.
It’s not funny to get short-term financing from a hard money lender and then not be able to flip the property.
The next important criterion is to determine if you can potentially make a profit with a particular property. In the end, you want to make money, don’t you?
Many wholesale real estate investors look for fixer upper properties that are offered about 25% below market value.
It is not easy to find these properties, and it can take several hours to go through different property listings on different property listing platforms such as Zillow, for example.
These platforms are not necessarily designed with active real estate investors in mind.
So what happens?
This often means that you will need to go through hundreds, if not thousands of different listings, to find a handful of potential deals, and the usual property listing platforms don’t have exact filters for investors and only some trivial ones.
Again, they are not particularly designed for investors.
You will then often need to manually add the property information in an Excel sheet to crunch the numbers and find out if it qualifies as a potential deal with profit potential where an offer could be made or not to a seller.
Once a potential fixer upper deal is found, you will need to crunch some additional numbers to determine the after repair value.
Some do this before making the first contact with the seller, and others do it later, after getting some further information about the state of the property.
This basically depends on your style of doing business.
One rule of thumb often used to prepare an offer to a seller is to multiply the after repair value by 70% and subtract the repair costs and the wholesaling fee (your profit).
Whether you include a wholesaling fee or not depends on you being a wholesaler just flipping a contract to another wholesaler or if you will flip the property as a fix and flip.