BRRR, flip, and property investors (market)

You might not find many to share what their strategy is in this space, but I'll share mine.

I focus on red tagged houses. I go looking for houses that the city has deemed uninhabitable and there for can't be granted a certificate of occupancy. The city has two options - sue the current owner to try to get them to do with the property, or condemn them. Both options cost money...so I fill the gap between. A lot of times the house isn't in THAT bad of shape but they do have to be brought up to new construction code on everything which generally means you have to strip the house down to the studs and start over. Water, electrical, HVAC, lighting, sheetrock, roofing....basically everything has to be brand new. This is good for a couple of reasons. At the end of the rehab process the home is, with the exception of the bones, brand new. I then generally price it 20-30 cheaper per square foot than new construction and sell pretty quickly.

My wife is in real estate, so she knows the ins and outs of tracking down current owners and trying to get them to sell at a fair price.

The good news is that most of the time the current owner is glad to get something out of the house without any investment on their part and city is happy to not have to deal with it anymore.

Happy to answer any questions. I have a partner that built houses for many years so I have a leg up in that department.

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The competition is simply overpaying for everything.

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Yep. I have been going to the Sheriff sales and people are overpaying considering the extent of work needing to be done but the ones I see overpaying are looking to build their rental portfolios. Not flip.

Another thing hurting is the rise of "wholesalers" like the We Buy Ugly Houses franchises. Those guys need to go away. All they do is jump in and get a house under contract then flip the contract and do a double close for $10K profit without ever providing any service other than advertising heavily to sucker people into "selling" to them. Wholesalers are scum and the whole industry needs to go away. They are just another leech driving prices up.

That being said, there are deals but you have to be heavily involved to find them. Just casually looking for a single flip like you say you are isn't going to get you a property.

There is? But you’re not gutting a place and spending a decent amount on it to get it looking nice. Section 8 yea, you’re getting paid for it however it’ll be back to square one in a few yrs with it being destroyed again

I just paid 25k for a house that has a mortgage on it for 95k. Needs some work. Will sell for 200+

As would I lol