“Do you think the market is making flipping houses harder?” my friend asked as she stirred her cup of coffee. I knew immediately what she was talking about.
She had just missed four houses in a row and was buying on the open market where people were bidding too high.
People are constantly asking me if flipping houses is harder. The reality is that they usually get into the market when it’s easy and don’t realize that house flipping changes over time. Markets get hot, markets get cold. There’s always a different set of problems to deal with.
In my friend’s case, she had been going after easy flips—houses that just needed a little updating. They were houses that first-time homebuyers were interested in as well; so now that the market was hot again, she was getting outbid.
“Maybe you shouldn’t be buying houses off the market,” I suggested. “You need better lead generation.” But she just shrugged and said, “It just feels harder.”
Flipping houses is a great business, but you need to know what you’re doing. And you have to avoid making it harder than it has to be. Here are a few things you should know.
Yes, It’s Getting More Competitive Out There
It’s undeniable. There are more people flipping houses today than ever before. It’s a combination of factors:
- First, more people now know about house flipping—whether through friends or media.
- Second, the real estate market got hot. People started to think seriously about investing in real estate.
- Finally, it’s been a great industry for some time, so the people who started flipping twenty years ago are likely still going at it today.
But what does increasing competition do to the market?
Well, if you’re just starting out, it’s a lot harder. You’ll have a lot of trouble getting leads, booking contractors, and finding the right buyers—which means you won’t even be able to sell at the right price.
But at the top, the landscape really isn’t that different. The market is flooded with newcomers and people who are going for easy and affordable flips.
With the right partnerships, however, there are countless networking opportunities, mentorship programs, and tools that can help someone build a solid business.
If You Can’t Get Real Estate Leads, You Need Better Marketing
If you’re looking to purchase easily flipped homes on the market, the time has already passed. You need off-market leads. Ideally, you need the leads to come to you.
My friend had entered the market during a downturn when it wasn’t very competitive. She had been able to snatch up a few great properties in a row, make a few minor modifications, and hit the market. But by the time she’d finished that first batch, the market was booming again.
I told her that by buying properties off-market, I never even had to engage with the competition. Most of my leads came directly to me through the strength of my marketing.
If You Can’t Find Good Contractors, You Need a Network
Why is it so hard to find a good contractor? Well, the good contractors are already booked.
There are new developments, people buying first homes, and—of course—other flippers. Most good contractors are booked out for months. Maybe you already have a contractor’s license and want to do the work yourself. But there’s only one of you and there’s a lot of work.
Finding a good contractor frequently occurs through referrals. And any flipper worth their salt knows that once they find a good contractor, they don’t let go of them. The speed and quality of a contractor can make a huge difference.
If you’re starting from scratch, you need resources. You need to ask around for word-of-mouth references, compare quotes, and dig into reviews. But if you already have mentors and a network in place, it becomes much easier to find reputable contractors who won’t overcharge.
If You Can’t Value Houses, You Need the Right Tools
Apart from generating leads and finding quality contractors, it’s becoming harder to predict exactly how much a house is worth. Hot markets and interest rate fluctuations mean a house’s value can change from day to day—sometimes to the extreme.
That’s not just a problem when selling, though. It’s a problem when buying too. How can you even try to follow the 70% rule if you don’t know how much you’ll be able to sell a property for?
Software tools can help. Some are comprehensive, data-driven and give investors key insights into what a property is worth, what it will be worth, and how expensive it will be to repair.
Make Flipping Houses Easier with the Homevestors® Team
“You need to sign up with HomeVestors,” I told my friend after hearing a few more of her complaints. I’d suggested it before, but she’d brushed me off. She was proud and liked having complete autonomy.
But in this case, she really was just making flipping houses harder than it had to be.
As an independently owned and operated HomeVestors® franchisee, I explained to her that she still could do things her own way. I also told her that I had complete control of my own operations. HomeVestors provided me with initial week-long training, a mentor, proprietary tools and software, marketing, and leads, but what I did with them was completely up to me.
If you find flipping houses harder, you’re not alone. But there are tools and opportunities out there that can even the playing field. Real estate is always going to be a market that’s constantly changing. The more people you have on your side, the easier it will be to change with it.
As a HomeVestors franchisee, I never had to purchase a property on the open market. I have an arsenal of real estate marketing tools to help me market directly to sellers and research individual properties and neighborhoods. I also have proprietary software like ValueChek™ to help me evaluate properties and repairs.
Don’t make flipping houses harder than it needs to be. Contact HomeVestors to start building your business today.
Each franchise office is independently owned and operated.