As a real estate flipper you should realize that you make your money when your buy.  You simply realize your profit when you sell.  If you fail to buy the right property at the right price then you will be for a rough ride the entire time and your property may not sell.

For me the best possible real estate deals have been 3 bedroom 2 bath in the middle class parts of town.

Sure there are plenty of investors that look to make money off of low income houses and also on pretty high end homes.

But for me I look at the 3 bedroom 2 bath homes as the sweet spot.  Trying to sell a 2 bedroom home is very tough unless you have the ability to turn a room in the house into another bedroom.  But even then the rooms will probably be too small.  I also believe that the average family needs 3 bedrooms.

Looking at homes in an inventory perspective and supply and demand it looks like this…

There are a lot of low income homes but these homes are not desirable and no one really wants to live there.

Middle class homes has a nice supply of homes and people want to live there.  People are moving up and down in society and will be living in these homes.  Some are moving up in society from low income and others are moving back to these areas from their high end homes due to job downsizing or other related reasons.  People also want to live in these areas.  So in summary there is enough of them to go around and enough people to buy them.

Finally high end housing has a lot of money to be made but these types of homes can sit on the market for a while.  The amount of homes is very few and there are very few people able to afford these type of homes.

So if you are looking to do your first flip or are looking to set yourself up on the right foot look to 3/2 homes in the middle class part of town.

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