As you gear up to find your first fix-and-flip opportunity, having a detailed plan for where you want to perform the flip is crucial for getting the most ROI (return on investment).
Before you’ve even decided on a search region, there are a few questions you may want to ask yourself to find the markets with the most potential. To get you started, here are four questions to consider when choosing your market:
1. How Long is the Commute?
Unless you’re a full-time fix and flip investor, you probably won’t feel like driving 1-2 hours to the property after work each day.
It’s important to evaluate the distance for your commute so you can target properties in your desired region. Additionally, use your local traffic as a factor when determining your commuting time. For example, if you typically get out of work at rush hour and will be driving to the property at this time, you may need to tighten your search region even more.
2. How Well Do I Know the Area I’m Searching In?
Knowing a lot about the area of interest is useful when looking for outside help with the flip.
Whether you need a contractor, inspector, lender, or someone else, knowing who to call helps cut down on the trial and error of finding a reliable, skilled pro! Additionally, if you have a large network in the region you’re doing the flip, word-of-mouth is a great way to spread the news once it’s ready to sell.
3. What Does the Area Have to Offer a Buyer?
When it comes to getting a great return from fix-and-flip homes, demand is essential.
The more people the property appeals to, the more offers you’ll get when it’s time to sell. In turn, you can be pickier about which one you accept, potentially helping you sell for above the asking price!
Demand is highest in the areas with the most local attractions. Is there a college nearby? Highly-rated schools? A thriving downtown scene, or maybe an abundance of outdoor attractions for nature lovers?
If you can score an off-market property in a bustling market, buyers will likely pay top dollar once the flip is complete.
4. How Well Are Homes Selling in the Area?
In some areas, homes will sit on the market for weeks or even months before generating buyer interest.
As a fix and flipper, these are the areas you may want to avoid for your investment as you’re going to want a quick return to pay back any loans you took out for the flip. Luckily, with PropStream, you can easily gain insight into market and sales trends!
It’s super easy to uncover this information, simply:
- Use the “Statistics” tab to view the local trends for home sales, including:
- The average number of days properties have been on the market
- The average price per square foot
- How rent and sale prices have changed in the last 30 days
- Apply Heat Maps to an area for a visual representation of price growth
Doing the research and preparation to find the best market will pay off once you’re ready to sell the house.
Want to Learn More About Planning Your First Fix-and-Flip Project?
Check out our Academy course: Fix and Flip Like a Pro: Find Properties & Maximize ROI! In this course, you’ll learn how to use unique filters to find off-market properties, how to reach out to fix-and-flip leads, how to get financing, and so much more.