Hi, I’m Warren Oberholser. I’m a realtor in the East Bay Tri-Valley area in Northern California. My goal is to help both buyers and sellers get maximum results for one of their biggest investments, their home.
This BLOG is about finding a property fast in the Tri-Valley area so you can flip it. The key to this is to know where to look, or more importantly, where not to look and waste your time.
Now, how do I know so much about this? Well, for the first eight years of my real estate career, I worked pretty much exclusively for an investor.
My role was to drive to each home, condo, rental property, etc., they considered purchasing, to assess the condition of the property. There’s a lot more to this, but just to know that my first role was to investigate the condition of the property. When the investor finally acquired the property and then flipped it, I would get the listing, and of course, put it on the MLS and sell it, and that’s when I would get paid.
This BLOG is going to be the cursory or the abridged version of how to flip a home. There’s so much more to finding and flipping a property. So for just this article, I’m going to discuss how to find the property. As far as how to flip it, we’ll save that for another BLOG/video.
Back in the day, my investor acquired the majority of their properties at the trustee sale. A trustee sale (Should you buy a house at an auction?) is part of the foreclosure process a bank takes when it is for closing on a home. Foreclosure is a legal process. To understand more about foreclosure, you’ll find a great article in my blog called the Six Phases of Foreclosure by Investopedia.
On occasion, the investor would acquire properties as short sales and REOs. Now, to learn more about short sales and REOs, visit/watch ‘Forbearance, Short Sales, and REOs in the Tri-Valley area‘.
So, where do we not look for properties to flip? Well, presently, we’re not going to look at the trustee sale. The reason being is the economy (Economic conditions) (Economies of Scale) has improved a lot over the last 10 years, and we don’t have any more of those crazy adjustable ARM mortgages (Did adjustable Rate Mortgages Cause the 2008 Financial Crash?).
Okay, then where do we look for properties to flip?
Well, the first place are probate sales.
Probate is another legal process. Probate is a court procedure that comes into play when somebody passes away to validate and carry out the deceased’s will(probate court).
Part of the probate process is the general distribution of the deceased’s estate. Now, this would include personal and real estate property. To learn more about probate visit/watch, How to Sell Probate Property the Right Way.
In this video, you’ll learn that it can take up to six months to sell your home in probate. The key here is to find a list of probate properties and send out letters stating how you would like to acquire the homes. Probably the easiest way is to get a list from the courthouse. In the past, you would personally go down to the courthouse to acquire this list. But now with COVID-19 guidelines, you may have to just handle this online. You’ll find links for both Alameda and Contra Costa County probate courts. You may also find a third-party website or company that generates probate lists for a fee. Probably the simplest way to find this is just to Google probate leads.
Another way you can get leads is to network with a probate attorney. This can be the most promising, especially if they’ll refer you to probate cases directly. Once you have your list, you’re now going to send out letters stating how you’d like to purchase their property directly from them.
When somebody responds to your letter, set up an appointment to view their home condo or whatever the property is that they’re selling in probate. Probate can take up to six months before the family is allowed by the probate court to sell their home. So, the sooner you make contact and connect with them will increase your chances of them deciding to work with you.
Also, not everybody’s going to want to sell their property at a discount. It’s been my experience that the three types of probate buyers that will most likely be interested in selling to an investor are: 1, properties that are in need of major repairs. This could be section 1 issues or foundation problems. 2, family members who are not getting along well. And 3, all the above. Okay, that is how to acquire probate leads.
The second area to look into are short sales.
How do you find a short sale? Well, the first way is to check the MLS for active and coming soon short sales. The second way is to send letters or emails out to local realtors, advising them if they have a short sale listing coming up, you’d be interested in purchasing it.
The last area to look for properties to flip are REO’s.
REO stands for bank owned properties. This is when a bank forecloses on a property and lists the property for sale on the multiple listing websites. REOs are also starting to make their way back into the market. Not so much yet in the Tri-Valley area. The nice thing about an REO is it is basically a clean purchase. The buyer’s agent will present the offer to the listing agent and once the bank approves, it can close on the terms of your contract.
I need to point out that you can find a house fast to flip. However, to flip a house fast is a bit of an oxymoron,
probably a better way to say it is to hurry up and wait.
So, for example, for both probate and short sale purchases, they can both take up to six months to close only until it is closed is when you can actually take possession on the property to repair and get it ready to sell. Then once the property is ready, you would list it on the market, which is the multiple listing service, and once it gets into contract it can take 30 to 40 days to close. And this is when you get paid.
How do you get properties fast to flip? You have to think of this as fishing, having multiple lines in the water in this current market, you have basically three fishing lines, one for probate, one for short sales, and one for REOs.
The key, or formula, to be successful in home flipping is to have several properties in the works in all different stages.
In the first stage, you work your leads to locate properties. For probate, you’ll need to find homeowners or beneficiaries who will agree to sell their property to you. For short sales and REOs, you need to have the seller or the bank accept your offer.
The second stage is the waiting period. For probate, it can take up to six months for the court to allow the beneficiaries the right to sell their inherited home. For short sales, it can take the sellers bank three to six months to approve the short sale. Once you have approval, your purchase contract timeline will now take effect and you’ll close according to your terms. This is when you finally receive ownership on the property. Now, for an REO, there is no approval waiting period like short sales and probate court. When the seller, which is the bank, accepts your offer, you’ll close for the terms of your purchase contract.
Once the contract is closed, again, you have ownership of the property and you can immediately start your rehab or repair phase.
And the last is listing the property so it’s on the MLS, and again, waiting for it to close. And that’s when you get paid.
One note, for short sales, some banks have a stipulation that the property cannot be flipped for a specific period of time. I have only seen this once with one of our short sale purchases. And I believe the time period was something like three to six months. So, the key is putting all of this into motion and stay on it so it runs like a smooth clock.
I hope you enjoyed this article. Please let me know if you have any questions. Warren
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Hello…I work with both buyers and sellers in the Tri-Valley area of Northern California. The Tri-Valley is comprised of 6 cities: Pleasanton, Livermore, Dublin, San Ramon, Danville, and Alamo. To better understand what each city has to offer, I have created a Pros and Cons video and BLOG for each – (Pros & Cons for Pleasanton, Pros & Cons for Livermore, Pros & Cons for Dublin, Pros & Cons for San Ramon, Pros & Cons for Danville and Pros & Cons for Alamo). If you are thinking about purchasing or selling a home, please reach out to me by text, phone, or email. If it is convenient, I can schedule a Zoom chat so we can discuss your home goals. Wishing you all the best on your home journey. Cheers!
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