House Flipping 101

Real Estate Agent with eXp Realty RS-82566

It breaks my heart when I meet a first time house flipper that has put blood, sweat, and tears into a project only to find out they have over improved the house and will not be able to get out what they put in.  With that in mind, I have a few tips to help steer you home flippers in the right direction so you have a more realistic point of view BEFORE you start!

Always do a preliminary budget before you purchase the home - This is so important because you need to know if the purchase price + the budget will = a nice selling price (meaning profit!!!) for you. 

Always determine what you can sell it for when it is complete before you purchase - You need to know if after all the hard work is done you will even be able to get your asking price.  I suggest talking with a real estate agent to determine what houses are selling for that are in excellent condition in a particular neighborhood.  After you have that figure, plan on listing it for just under market value.  The goal here is to get in and get out.

Choose upgrades that are realistic for the neighborhood - Be sure to do your homework before you start the project.  You want to know what upgrades are expected in a given neighborhood that will get you a nice return on your dollar.  There is no point in putting in a gourmet kitchen for example if all the other homes in the neighborhood have a standard kitchen.  You have to stay consistent with what is happening in the neighborhood.

House flipping can be a lucrative career if you do it right.  Remember to keep your personal taste and emotion out of the flip.  Treat it like a job and nothing else.  If you do this, you should have success!!!

Comments (6)

Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH

Staci Good Advice, I think there are buyers out there that are looking at making money in real estate as a side line. The first thing they hear is buy the cheapest place in the neighborhood, that is good advice , but once you over improve and become the most expensive in the neighborhood, you will have an appraisal problem and many buyers are not looking to pay for the high-end of a area either. Steve

Jun 28, 2008 02:49 AM
Rebecca Schrader
Competitive Insurance of Dundee - Dundee, FL

I would tell first time flippers to work in a partnership with an experienced flipper.  There are so many short cuts that newbys cannot find.  I know a guy that is happy to make $10,000 on each flip!  This is a bad goal IMO.

Jun 28, 2008 02:53 AM
Ron Moore
RE/MAX Professionals/Regal Builders - Retired - Florence, SC
MOORE Thoughts

Good thoughts, Staci.  the most important tip was working with an experienced Realtor who knows the market.  Getting good advice and listening to it is essential for success!  Thanks!!

Jun 28, 2008 02:57 AM
Linda Coen-Cushman
Coen-Cushman Real Estate, LLC. - Fort Bragg, NC

Great advice.  I think keeping the emotion out is the hardest part when you are doing the work yourself.......

Jun 28, 2008 03:10 AM
David Spencer
Keller Williams Northland - Kansas City, MO
Show Me real estate in Kansas City

You flip to make a profit. Unnecessary amenities turn it into a loss. Go bare bones and do some of the work yourself.

Jun 28, 2008 03:53 AM
Thom Kraley
NewCastle Home Loans, LLC - Chicago, IL

You are spot on.  Good old fashioned due diligence is key.  Booms create environments where emotions take precedent over underwriting and cloud judgment. 

Jun 18, 2009 01:34 PM