How to Find House Flippers Near Me (and Other Cash Offer Options)
For better or worse, situations sometimes arise that necessitate a quick home sale. Maybe you just got offered your dream job on another coast and only have 30 days to pack up and move. Or maybe you’re struggling with loss of income, a serious health diagnosis, or a death in the family, and you must sell a house quickly to cover expenses.
Whatever the case, if you’ve got a fast, easy sales process in mind, you might be considering selling your home to a flipper or iBuyer. Both of these options promise a quick cash offer and streamlined closing process, but there are differences between them that are important for sellers to understand before you sign away your home.
In this article, Joel Freis, a top Miami real estate agent on Denise Madan’s team, and San Antonio-based real estate investor Nick Disney will help you better understand house flippers, how they work, and where you can find a reputable one near you.
What is a house flipper?
A house flipper is a real estate investor who purchases properties, makes the needed repairs and renovations, and then lists the property for a profit. “We take calls from people who want to sell a house directly for cash,” says Disney. “We’ll then set up an appointment to visit the property and make a cash offer.”
The essential factor in a flipper sale is that the sellers usually own a home that requires significant repairs, which they lack the funds or inclination to address. According to Disney, there are no properties he won’t purchase — including those that have foundation issues or have been gutted by fire. “Once we take ownership of a property, our crews get to work so that we can get the property listed for sale or rent.”
The process looks something like this:
1. The investor researches and tours the property to calculate the estimated value of the house once it’s been fully repaired. This calculation is based on the location and size of the home, as well as the average sales prices of similar homes in the area.
2. The estimated total repair costs are subtracted from the total. “The most expensive repairs involve the roof, HVAC, foundation, and major plumbing issues,” Disney says. “We’ll address structural issues first, and then will redo things like the bathrooms and kitchens.”
3. The investor will subtract their profit for the work involved in preparing and listing the home for sale. While every business is different, many house flippers will use the 70% rule for this calculation, which uses this simple formula to come up with their maximum buying price for a home:
[The home’s after-repair value (ARV)] X .70 – [The estimated repair costs]
Here is an example scenario showing how the 70% house flipper rule works:
The flipper estimates the ARV at $250,000
They multiply $250,000 x 0.70 = $175,000
The flipper subtracts their anticipated repair/renovation costs: $35,000
Subtract the $35,000 from $175,000 and you come up with $140,000
According to the 70% rule, $140,000 is the estimated maximum price a flipper might want to spend on this example home.
4. The investor makes an offer on your home. If you accept, they’ll get to work on the homebuying process. Depending on your timeline, the entire deal could be completed within as little as seven days.
