Getting Started: Bidding on a Fix and Flip Property

Looking to bid on a fix-and-flip property? Before you do, it’s important that you create a plan that not only includes detailed information about the property itself, but also the capital you’re going to use in order to purchase it.

In competitive markets, it’s highly possible that there will be several bids on a property, so having access to cash in order to make a competitive bid is important. So what can you do to ensure that your bid gets noticed by the seller and has the highest chance of being accepted? Let’s take a closer look at what you’ll need to do to put the odds in your favor:

Get a Pre-Approval Letter

The first thing you’ll need to do to ensure your bid is taken seriously is to get a pre-approval letter from your lender. This demonstrates to the seller that you meet all of the relevant loan qualifications. Since you’re looking to make a solid profit and return on investment, you’ll have to make sure that your profit margins are not too thin yet still make a compelling offer.

If the property you’ve got your eye on looks like it will need more work than you feel comfortable with, don’t hesitate to walk away. If the work needed is tolerable and you’re able to come away with a good return on investment, the next step is to make sure you have:

Fast, Reliable Access to Capital

Sellers looking to unload properties in need of repair want to do so quickly, without a lot of hassle. Especially in competitive markets, it may be a race to see who can underwrite you as a borrower and allow you to close quickly. In addition, the lender will have to have funds on hand to make sure they’re available when you’re ready to close.

Being able to offer the ability to close on a property with funding ready in a week or two can definitely put you ahead of a lender that can close within a month. You’d be surprised how this can be the deciding factor for the seller!

But by the same token, you want to be sure that your bid is strong enough to be accepted in the first place. That means not only being pre-approved by also making a compelling offer. The last thing you want is to be scrambling to get the funds necessary to buy your investment property.

By keeping these points in mind, not only will you be set up for success and have the ability to make a strong and solid offer, but you’ll have access to the funding you need to back up your offer. As a premier hard money lender, we’ve helped thousands of fix and flip real estate investors secure the financing they need to reach their investment goals. We’re proud to help investors throughout the Los Angeles area and surrounding communities. So if you’re looking to get pre-approved and make an offer on a property in need of repair, now’s the time to talk to us to learn more about how our financing options can help you reach your fix and flip goals.