testing to improve their knowledge and abilities and encourages members to follow a strict code of ethics. The association also provides its members with additional resources and tools to assist in finding and marketing properties effectively.
Of course, association membership doesn’t mean that a particular Realtor is more qualified than a given real estate agent, but the odds are pretty good that you’ll receive superior advice and service from a Realtor. To find a bona fide Realtor, look for the Realtor logo on business cards and stationery. Almost all Realtors make a point of proudly displaying this logo. You also can search for a Realtor in your area at www.realtor.com.
Picking an agent with the right stuff
Any licensed real estate agent can help you find, purchase, and sell a house, but you want someone whose experience and training are rooted in the business of flipping properties. Look for these qualities:
Specialty in your target area: The agent should know the market in which you want to invest and be well versed on property values, market conditions, and neighborhood news that may affect future property values.
Experience in other methods of finding homes to purchase: Shop for a real estate agent who specializes in your area of interest, such as these types of homes: For Sale By Owner (FSBO, pronounced “fizz-bo”), foreclosure, Housing and Urban Development (HUD), Veterans Affairs (VA), probate, or bankruptcy. With this approach, you become the fox in the henhouse with an inside connection. Consider choosing agents with different specialties. All agents are familiar with traditional sales marketed through the MLS, but some branch out into other areas, such as FSBO properties, sheriff’s sales, probate, bankruptcy, or real estate owned (REO) properties — repos owned by banks. When you have multiple agents who specialize in different areas, you broaden your selection of inventory. If an agent gets bank listings, buy from that agent because they receive both sides of the commission. When you flip the house, list it with the same agent. With the agent getting the listing and the selling commission (in my industry, it’s called a double dip), the agent will be more motivated to help sell the home.
Proactive approach: The agent shouldn’t wait for you to call but should contact you with any leads for properties in your target area. A tech-savvy agent can enter your contact information into an automated system that notifies you whenever a property meeting your criteria becomes available.
Eagerness to show houses: The agent should be willing to show you many houses before arriving at the right one.
Availability on short notice: If you see a For Sale sign in someone’s yard and want to see the house, you should be able to quickly contact your agent to set an appointment for viewing the house at a convenient time for you. The agent should have a cellphone number, a home number, and an email address; check for messages regularly; and respond promptly to text and voicemail messages. If your agent is traveling out of town, they should notify you of the dates and line up someone to field your calls.
Comfort with presenting low-ball offers: An agent who cringes at offering a price well below market value, is not the agent for you. The agent should be willing and able to pitch one or more lowball offers with a poker face.
Top-seller status: An ideal candidate is skilled at not only finding good deals but also marketing and selling properties for top dollar and in a reasonable amount of time. As you search the classifieds and notice For Sale signs and brochures in the neighborhood, note which companies and agents do a better job of marketing their properties.
Tech savvy: Real estate deals move at warp speed, and you want an agent who takes advantage of all available tech tools to find, buy, and sell properties. For example, your agent should have access to more powerful property-search tools than you can access on the web and set up automatic emails or texts to you when properties that match your search criteria become available. If an agent seems uncomfortable with technology, choose someone else.
Personal experience flipping properties: Personal experience isn’t a necessity, but it’s a big plus, because the person knows what flippers require to turn a profit and typically has a strong network of affordable contractors to perform repairs and renovations. Preferably, the person is no longer in the business of flipping properties and will alert you to all the best deals instead. Don’t use experience in flipping houses as your sole criteria for choosing one agent over another. You want a quality agent — experience in flipping is a bonus.
The best way to find an agent is by a referral from another homeowner (buyer or seller) — preferably, a friend, relative, or neighbor. When you have a list of 10 to 15 names, start calling around and interviewing your candidates to compare their experience, education, and certification, as described in the preceding list.
Recruiting Moneymen (and Women)
Flipping properties for a profit is all about money — getting it, spending it, paying taxes on it, and using it for your next flip. To succeed, you need someone who’s good at managing the finances while you’re busy buying, rehabbing, and selling. Actually, you may need at least three people who are good with money — one or more to loan you money, a second to help you manage it and save on taxes, and a third to recommend the best way to invest it. The following sections describe the types of financial assistance you need.
Finding financiers
Unless you’re independently wealthy, you need a source of cash to get started. You may be able to tap into your savings account, mortgage your home, and max out your credit card, but strong financial backing from investors can provide you with the capital you need to leverage your personal investment. The big question is this: Who can you ask for investment capital? Here’s a list to get you started:
Start with your friends and family and your attorney. They already know you, and charity begins at home.
Tell everyone you meet that you flip houses. An investor may hear about it and contact you but be careful — an investor may be looking for a newbie to snooker into a raw deal. Question any deal that requires you to take on an inordinate share of the risk.
Contact doctors, lawyers, dentists, and other highly paid professionals you know who may be looking to improve the return on their investments.
You have two options for financing your flips with other people’s money (OPM): Borrow the money (and typically pay interest on it), or partner with the person and split the profits. Either option will cost you money, but both options enable you to move forward on deals you would otherwise lose. When using OPM, invest it in line with your lender’s or partner’s
