House Flipping

House flippers purchase distressed or undervalued properties, renovate and improve them, and sell at higher prices for profit.

You identify potential properties (foreclosures, motivated sellers, distressed homes), assess renovation costs and potential value, purchase (often with financing or partners), manage renovations, and sell the improved property.

Success requires real estate knowledge and market understanding, renovation project management and contractor relationships, financial analysis and deal evaluation, financing access or investor relationships, and sales and marketing to exit properties.

Profit per flip varies enormously—$10,000-100,000+ depending on purchase price, renovation costs, market, and timeline.

Successful flippers complete multiple deals yearly.

Startup costs include first property down payment (conventional 20% or hard money loans with higher rates but less down), renovation capital (often $20,000-100,000+ per project), carrying costs during renovation and sale, tools and materials if DIY, insurance, and potentially partner capital totaling $30,000-150,000+ for first project.

Finding deals involves MLS searching for distressed properties, direct marketing to motivated sellers (probate, divorce, foreclosure, tax liens), real estate auctions, wholesaler relationships, driving for dollars finding distressed properties, networking with real estate agents, and off-market deal sourcing.

Revenue comes from profit on each sale, potentially seller financing creating monthly income, consulting with other investors, or teaching flipping courses.

Operating costs include holding costs (mortgage, taxes, insurance, utilities), renovation costs (materials, labor, permits), real estate commissions (typically 5-6% on sale), financing costs (interest), marketing for sale, and potentially unexpected issues.

Challenges include market downturns can trap you in properties, renovations almost always exceed time and budget estimates, financing access critical, carrying costs eat profits if property doesn't sell quickly, and competition from institutional investors.

Success requires conservative deal analysis (assume costs will be higher, timeline longer), strong contractor relationships or DIY skills, understanding your market deeply (what renovations add value), efficient project management, access to capital or financing, potentially starting with smaller less risky properties, and moving quickly (time kills deals).

Many successful flippers started with one property while employed, building capital and knowledge.