4 Reasons to Buy a Flip House in a “Bad” Neighborhood

Wed Jun 12 2019

A lot of crazy things can happen while you are flipping houses. For example we had a car get stolen in the middle of the day in front of one of our flips, while we were standing in the back driveway. That thief sure had some guts! I’ve had quite a few students ask me about that day, and whether or not it made me reconsider flipping houses in some neighborhoods. My answer is both yes and no.

You see, neighborhoods around the country change on a pretty regular basis. It seems like one year a particular neighborhood will be really “bad” with a lot of vacancies and a high crime rate. The next year the crime rate will be a little lower, and there’ll be fewer vacancies. The year after that, it’ll be an affordable neighborhood, and before you know it, people are paying a lot of money to get houses in the area.

That’s why, even though I learned to be a little bit more careful with my purse and my keys from that incident, it definitely didn’t turn me off of buying and flipping houses in some “bad” neighborhoods. Here are just a few of the reasons that I think really hard before I dismiss a property because of its neighborhood.

A Catalyst Has Gone in Nearby

When you see really good deals on houses in rundown neighborhoods, before you keep on moving down the list, take some time to look at the area and what’s going on there. If a developer is paying attention to the neighborhood and putting in a new grocery store or other new amenities, chances are pretty good that you’re looking at a neighborhood that’s about to turn around. Look for catalysts like this, and if you see them, you might want to snatch up that great deal before someone else gets it.

Homeowners in the Area Are Doing Renovations

Another good sign that a lower income neighborhood is on the upswing is that you see the neighbors doing renovations. If everyone around your property is working to improve their homes’ market values, and the neighborhood starts to look a lot better, you’re going to see a lot more buyers getting attracted to the area while prices are still low.

These Neighborhoods Are Great Places to Start Flipping Houses

Now, you don’t want to buy a flip house in a neighborhood where every other house is boarded up and rotting. However, if you catch a neighborhood that’s starting to rebound, you’ll still get a great price on any property you find there. That means that you won’t have to find as much cash to invest in buying and rehabbing the house. That’s a great way to get started on smaller deals so that you can build your way up to larger, more expensive flip houses.

You Can Research Local Crime Rates

If you’re not sure about a neighborhood and whether or not it’s too bad for flipping, look up local crime rates. You might be surprised at how low the crime rates are in some “bad” neighborhoods, and when you can show your buyers those rates, combined with steadily increasing market values, you’ll be selling your flip house before you know it.

Flipping houses is really all about being able to pick out a diamond in the rough. For the property itself, you need to be able to look past the damage and see your finished product. For the neighborhood, you need to look past your initial impression and see the trends and elements that show it’s on the rebound with positive market movement for when you’re done with rehabs and ready to sell.

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