Where can you find a rehab property with good potential for wholesaling or flipping?

Your first criteria for buying to wholesale, or to fix & flip, is to purchase at a steep discount from the local market value. So, you are looking for problems you can fix that will lower the price, substantially. That means properties with problems, and sellers with problems – both types of problems being the kind the homeowner can best solve by selling this property fast, for cash.

This is where the footwork comes in, and where you, as a wholesaler, add value for the real estate investor who will be saved doing this research. You’re going to present the project to her or him on a silver platter, as it were, rehab plan and profits already built in.

Properties for sale by banks that may yield good results:

• REO or Real-Estate Owned

REO’s are bank-owned properties that have already been through a trustee (foreclosure) sale process, but did not get purchased by a third party bidder.

• Trustee sale (auction of foreclosure properties)

Buying properties at auction can find some great deals – but you must know what you are doing to avoid extremely costly pitfalls! You don’t want to end up accidentally owing thousands in back taxes, or for some other financial lien that attaches to a property. I have several blog posts advising the best way to approach auction-buying.

Properties for sale by homeowners that may accept a heavily discounted price:

• Pre-foreclosure

Pre-foreclosures have been officially given notice of default and impending bank action, but not yet foreclosed by the bank. This can be tricky, because not all pre-foreclosures are for sale (yet), and not all homeowners are interested in offers (yet).

• Short sales

With the agreement of the mortgage holder, the sale is for less than the mortgage, in an attempt by the lender to recover what they can without taking possession of the property.

• “Motivated sellers”

Some sellers in good standing with their mortgage, or even holding 100% equity, nonetheless need to sell quickly for what they can get. Divorce, business problems, aging or ill homeowners, credit problems … all may be ready to accept a low offer with a fast closing that requires nothing more of them than signing the papers and picking up the check.

• “Fixer-uppers” and “work needed” are cues that the problems may be beyond the homeowner’s capacity to deal with – but not many home buyers can handle them, either. Such sellers may be ready to listen to a cash offer they can close with a signature, and then pick up the check.

Find even more ways to located discounted properties in my eBook How to Find Underpriced Properties: 10 Secrets for Creating Wealth with Real Estate in ANY Economy. And, learn from the mentors and guides at Street Wise Property Investing as you explore your future in real estate!

Where have you found homeowners willing to sell for steep discounts on the market price?

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