There's a new trend among home flippers: using Uber drivers to find new properties. Facing fierce competition and higher prices, home flippers are trying out new methods to find more properties and stay ahead of the competition.
That's where Uber drivers come into play. But how does it work, and is it worth the cost?
Why Home Flippers are Using Uber Drivers as Property Scouts
In a market with sluggish inventory, high prices and fierce competition, it becomes increasingly hard for flippers to find potential properties before they're snatched up. Margins are tighter, too, compared to previous years.
Across the U.S., flippers saw returns, on average, of about 39% during the first three months of the year. Last year, returns were at 49%. Annually, the number of flips is down 8%, so the stakes are much higher.
Some flippers are quitting while they're still ahead, but some are sticking it out and finding new ways to scout properties.
Many are using the services of Lyft and Uber drivers to find potential properties along their routes.
Some hire drivers privately, paying a fee (sometimes $500 or more) out of pocket to drivers who find properties that turn into sales.
Others use apps like Dealmachine to locate hire and find properties. These types of services allow flippers to easily hire rideshare drivers or even everyday people to scout out properties for investors. Drivers snap a picture of the property, and investors can see for themselves whether it's worth their while.
Investors procure their drivers, and pay them however much they want. Many will pay per referral, and then pay commission if they purchase the property (usually 10-15% of the net profit on deals). Some firms hire their own fleet of drivers, while others pay Uber drivers who are in between fares.
Some apps can use data to identify the property owners and even inquire about their interest in selling the home.
Should Flippers Hire Uber Drivers to Scout Properties?
Ultimately, hiring Uber drivers to scout properties allows flippers to reach larger areas and get their eyes on more properties. Drivers have the potential to earn quite a bit of money on the side just by taking photos of potential properties while they're driving around town.
Now that home flipping is big-business - about 40% of flips are made by companies and not individuals - it makes sense to get more eyes on more properties across a greater geographical region.
With the ability to pay commission on a sale, individual flippers can afford to go this route, and larger firms can use rideshare drivers to their advantage and grow their business more quickly. Finding more potential properties means potentially closing on more deals each year.
The only concern is finding drivers who can spot the right types of properties. Training may be required to ensure that drivers understand what to look for and what types of properties to invest in. Otherwise, you may just be wasting your time looking through dead-end leads.
