One of my most frequently asked questions is “how do you find houses”?
I find houses to fix and flip from many different sources including direct mail, text marketing, cold calling, bidding on online auction sites, the MLS, Facebook Ads and Google Pay Per Click Ads. But I also find fix and flip houses by driving around through target market neighborhoods where I buy many properties. We call this “driving for dollars”. Learn more about “driving for dollars” by listening to my podcast episode Finding Deals By Driving For Dollars.
In this video I am showing you a potential fix and flip that I came across on my way to a seller appointment. I turned down a wrong street prior to the appointment, and as soon as my appointment with the seller was complete, I drove back to this house to shoot this video.
You can clearly see the smoke and fire damage (black marks) in the video. There is even a fire notice sign that was placed on the house from the fire department. So it’s not difficult to spot (if you are driving slowly and looking at each house as you drive by).
In a situation like this, what you want to do is find the property owner. One old school way of doing this would be to simply look up the property on the Property Appraiser Website and find out where the tax bill is being mailed (this information is on the tax collector’s website). Then you simply mail a yellow letter or postcard (or both) offering to pay cash to buy the house.
In addition to that, you can also “skip trace” the owner to get their phone number. Once you have the phone number you can now call the owner directly on their phone and make an offer to buy their house. You can also send text messages to the owner of the property to make a “cash offer” to buy their house.
If the owner calls you back and you manage to have a conversation with them, then at that point it’s a simple negotiation of how much they want for the house and how much you are willing to pay.
The good thing about fire damaged properties is that the owner often has already received their insurance settlement (or will soon receive it). So they have zero emotional attachment to the house. In many cases they own the burned out shell “free and clear” with no mortgage.
Since they have no attachment to the house and they don’t want to spend the time and money to renovate the house themselves, the house has very little emotional value to them. In some cases, if the house has been sitting there for months and months, the code enforcement department will give the owner an ultimatum to either fix the house or knock it down. This creates even more urgency to “get rid of the house”.
Fire damaged houses are an opportunity for investors looking to fix and flip. You can actually subscribe to a Fire Incidence Report Network (called IPN) which will notify you every time there is a fire incidence report in your city or town.
You can make a lot of money fixing and flipping fire damaged houses. One of my most profitable fix and flips ever was a fire damaged house. However, I will caution you that If you are a beginner, and you are looking for your first fix and flip house I would not purchase a fire damaged house unless you are a general contractor. There are many more structural and other issues to deal with on a fire damaged property. The cost of the rehab can be substantially higher so this strategy is best for more experienced real estate investors.