House Flipping: Real Estate Data Glitches Are Creating New Opportunities

Are gaps in current real estate data creating new house flipping opportunities?

Good investment and real estate decisions require being informed. Making accurate assessments and forecasts on the market, values, and profits, requires reliable data. This can be applied to every part of life, and is especially important in house flipping. How can property investors access better information, recognize the gaps and flaws, and profit from them?

The Problem with Data

There are a number of data challenges for house flippers. Despite the big hype about ‘big data’ over the past few years, not all of the masses of statistics and numbers being produced is particularly useful, or helpful. That is certainly a part of the reason why legends like Warren Buffett (who just went on a new $12B investing spree) continue to urge investors to focus on each individual opportunity on its own merits, and ignore the ticker feeds.

Flawed figures are common in real estate. Even the National Association of Realtors once had to go back and revise several years of past real estate stats. Lagging data is a big problem too. Real estate statistics are often published a quarter or more after the fact. What good is it finding out what happened 3 months ago? You already know it. The media rarely helps either as it consistently manipulates numbers to create news stories that attract readers. This is particularly true of misleading seasonal data. Experienced real estate pros know that there are seasonal dips and flurries of activity each year. They also know more macro factors like elections and the revolving cycle can have the same effect. Unfortunately, most average buyers and sellers, renters, and new investors don’t have this knowledge. They get fooled into making poor decisions, and missing out on opportunities. Some might argue that is the whole purpose of this media and data frenzy we live in.

In addition to housing statistics investors face this in their marketing too. We recently saw Facebook revising figures that dramatically misrepresented advertising performance and opportunity. Twists like these can leave real estate marketers focusing on the wrong metrics and goals, at a huge cost.

Accessing the Data

Forget the news headlines. Sometimes even the same news sites publishing completely contradictory stories, on the same day. Sites like Zillow, Trulia, and RealtyTrac, provide some rough numbers to get an overall reading on the market, and to see what is being fed to consumers. Compare these sites to see the gaps and contrasts for yourself.

Where these sites are often flawed is in incorrect underlying information, and information that can take months to show up. Some faster, and sometimes more accurate ways to get a pulse on the market may be via local county property records, local weekly MLS statistics, and polling local real estate agents and investors via social media. Compare this information about the recent past with what you are hearing at the gym and coffee shop, and at boardroom mastermind meetup groups. Having an experienced coach who has seen all these cycles before, and being able to tap into real time lead databases can help too.

Gaps & Leaps for House Flipping

Comparing the publicized data in the news to what you are hearing and seeing on the street – where are the gaps? What does the data suggest was happening last month or quarter, compared to what is going on now, and the trends likely to flourish in the next quarter?

If you look at November 2016 to January 2017, you have a lot of negative data. Zillow for example; predicts slowing (but positive) growth in many major US cities, which it names as ‘Buyers’ Markets’. It even pegs San Francisco to begin losing property value in 2017. Yet, many investors are likely experiencing a huge surge in demand for property locally, and now see a new era of economic optimism likely to drive strong growth for four more years. So, we’ve got soft data from the holiday season and the uncertainty over the election, along with bland forecasts as no one knew who would be the next president. Then we have what’s happening now in the market, and a good chance the next round of data will be far more upbeat.

This is a huge opportunity for real estate wholesalers and flippers. Those relying on the old data are dropping prices, and are missing buying opportunities. Others who are optimistic and tuned in are taking advantage of this to lock in contracts and rehabs deals which they can resell for huge profits over the weeks and months to come.

Don’t be fooled by the data. Don’t gamble either. Get to the real info, get expert insight on it, stayed wired into your markets, and make smart plays while others are looking at the wrong figures. Of course, wherever possible, try to help educate others as well, so that they can make better house moves too.