In wholesaling (short term flip without rehab), you want the type of house that your buyers will want, the ones that, for them, sell the fastest, and, of course, ones they can make a profit on. Following are some tips on what you should be looking for.
In general, especially if you are just starting out, avoid houses in the high end of the market. Yes, they can look beautiful,and clean up real nice, but most retail buyers will not be able to afford to live in them. And as rentals, they are murder when investors are trying to cover the mortgage payments.
You want to work mainly with houses in working class neighborhoods. Investors will be interested in these types of homes for rental purposes. And a majority of reliable renters will want to live in these neighborhoods.
Look for houses in need of repair. Look for peeling paint, broken windows, unmowed grass, general disrepair.
Especially in the beginning of your career, deal mainly with houses that do not need structural repairs, like foundation work. You will receive your fees quicker because any needed repair work can be done relatively quickly.
In the neighborhood you are working in, you want houses that are most affordable for first-time buyers. Those are the houses your buyer will want to rent out.
Put another way, you want houses in the median price range for your area.
The ideal house investor will want to buy will have 3 bedrooms and 2 baths, although you can get away with 1 baths. This is the bread and butter rental house for your buyers. If your area has only 2 bedrooms and 1 bath, you may have to go with that. Or, go farther afield to do your hunting.
What about war zone houses? Generally, you will do better in working class neighborhoods. However, if you have buyers on your buyer’s list who want war zone types of homes, go for it.
Avoid houses with weird floor plans. For example, houses where one is required to go through a bedroom to get to a kitchen, etc. They will be harder for your buyer to rent or retail.
Avoid houses that are too small. Medium size houses are what you are after. Medium for your area, that is.
The more equity a house has in it, the better your chances of making a deal with your buyer. More equity means there is plenty of room for your buyer’s profit, not to mention your fee.
You, of course, want to be dealing with motivated sellers who are willing (or forced) to take a discount from their asking price.
You are always looking for bargain properties where there is plenty of room for profit.
