Flip Thy House

Pick a Slice of the REI Pie

One thing that’s helped me a lot with actually motivating and embarking on my own little flipping experiment was a bit of inadvertent serendipity. I’d been telling myself I wanted to try flipping houses for years, purchased many books, read voraciously on the web, all that stuff. But it wasn’t until my wife and I moved out of Austin, to a much smaller town, until I really got serious and was able to locate an investment property and pull the trigger.

It’s really easy to get lost in a maze of possibilities, especially when starting out. I’d look at the Austin listings fairly regularly but it was hard to get a fix on general trends, as far as being able to quickly spot potential value, to track comps that had contracts pendings, and even simply knowing the ballpark area of town a listing was in, as I seemed to waste much time looking up properties at Google Maps, etc.

I was also floundering around in a larger sense as far as what I was after, mulling the possibilities of foreclosure auctions, REO properties, tax deed sales, duplexes, SFR fixer uppers, you name it. I just didn’t know where to start and couldn’t get a toehold in the maze of listings, as far as convincing myself I knew enough to make the leap.

Once we moved out of town, though, to a smaller community of 10,000-20,000 people a bit out in the country, things got a lot easier. I started checking the MLS listings every day and could actually stay abreast of not only what was listed but what was selling, and at what price, as there are typically only 100-125 listings total at any given time.

After getting familiar with the area I also pretty much immediately knew what part of town listings were in, and could drive by to eyeball 5 or 6 properties in half an hour, as opposed to literally spending half a day to see the same number of properties in Austin, battling traffic.

Most of what is available are SFRs, so that’s what I paid attention to. Kind of a backwards way of solving the information overload problem, but it worked for me.

The obvious downside to the above is that I’ve got a much smaller pool of potential properties to work with. It took me a few months to find something that was promising enough to go after for this first flip, largely because I simply couldn’t find anything attractive enough.

On the other hand, if you specialize in a smaller market you also have less competition in general from other investors, which balances out things to some extent.

For myself, picking a much smaller slice of the potential REI pie helped me to focus and to finally motivate to buy a property to flip and see what happens. One thing to keep in mind is that you obviously don’t have to move to a small town to focus your efforts, and it doesn’t have to be fixing and slipping SFRs that you focus on.