Home Flippers Get Creative as Competition Heats up & Deal Spreads Get Thinner in Houston & California
Forward by Steve Dancer – Investor
Investing in Houston TX as well as California has truly changed dramaticallyt over the last 5 years! The low hanging fruit like Foreclosures & Short Sales have been diminished and the amount of foreclosures and short sales are far less frequent currently than 5 years ago!!! Therefore a new strategy for this moving target must prevail. Enter “A Retail Revolution“!
Marketing directly the the actual seller to secure the property and then marketing directly to the retail end buyer thereby doing the Texas Two Step bypassing the wholesalers and mid level flippers working the deals start to finish earning the most profit. This market is demanding a “Retail Flippers” mentallity and approach a.k.a. “The Smart Flip”.™
As noted in prior articles I have posted for our Flipping Houston Houses members, I sometimes come across these articles that I feel can help you build your business. The article below is no exception. Please read and study the information as shared by the writer below about Dough Vans Soest who is an avid investor in California. However, while he is not an investor in The Greater Houston Area like all of us, the approach to marketing and the biz is indeed very similar to our own personal approach and design. I strongly encourage you to read what he has to say and how Doug has built a huge business using similar techniques we personally use and that any Investor can use today! Enjoy!!!
____________________________________________________________
Doug Van Soest has been flipping properties in California’s Inland Empire region since 2008. He used to buy foreclosures off the local area listing services, but no more. Now he has a new strategy.
“As those became less and less and the competition was getting higher and higher, it was harder and harder to find homes that it made sense to flip. We started mailing directly to homeowners to see if they’re interested in selling,” said Van Soest, who flips 30-50 properties a year, mostly priced under $300,000.
He targets several different categories, using real estate databases and new real estate apps. He started mailing to small-scale landlords who don’t live near the homes they rent out. The hope being that they might be tired of dealing with the property management and just want to get out. He is also going after potential sellers who are not on the market.
“Lately, we’ve been mailing just to regular owner-occupants. We do filter it down, like we’re not going to mail to someone who just bought a house in the last two or three years,” said Van Soest. “Usually we’re looking for someone who has been there a long time. We like to mail to older houses, and the reason for that is we’re trying to find a home we can improve on, that we can pour some money into and add value to it.”
For the seller, he says, it is an enticing prospect. They can sell the home without paying commission to a real estate agent and without having to fix it up to show. They don’t have to go through any of the grueling, mortgage-dependent sales process that regular sellers do.
“Sell it quickly and be done with it,” said Van Soest.
Flipping actually edged out renting as the preferred strategy for investors for the past year, according to Auction.com, a real estate auction company. Investor demand in single-family rentals has been very strong, as homeownership is now at the lowest level in half a century. As buyers trickle back, however, especially to lower-priced homes, flipping is more attractive.
“Rising prices and extremely limited inventory make a nearly ideal environment for real estate investors who want to buy, fix and flip properties, and that is precisely where we are in today’s market,” said Rick Sharga, executive vice president at Auction.com.
The average gross return on investment was 33.8 percent for completed home flips in the third quarter, up from 32.7 percent in the third quarter of 2014, according to RealtyTrac. Some markets, of course, are more lucrative than others. Baltimore, Tampa, Florida, and Chicago hold the top spots for gross flipping returns. The largest share of flips goes to Nevada, Florida and Alabama.
____________________________________________________________
Always remember: “If You Fail to Market ~ You Will Market to Fail. ~ steve dancer
See You at The Closing Table
Steve & Peggy Dancer
http://NorthHoustonHome Buyers.com
http://HoustonLuxuryHomeBuyers.com
