Start Flipping Houses

1. 1

   Master the two numbers that decide every flip

   After-repair value (ARV), what the finished house realistically sells for based on recent comparable sales, and rehab cost, what the work will truly run. Learn to estimate both conservatively. A common guardrail is the 70 percent rule: pay no more than about 70 percent of ARV minus rehab costs. If you cannot estimate these, you are gambling, not investing.

2. 2

   Solve funding before you find a house

   Flips are funded with cash, hard money loans (short-term, high-interest, asset-based, often 10 to 14 percent plus points), private lenders, or partnerships. Hard money can fund most of the purchase and rehab but eats profit if the project drags. Know your financing, its true cost, and your carrying costs (loan, taxes, insurance, utilities) per month before you make an offer.

3. 3

   Build the team you cannot flip without

   A reliable general contractor or trusted trades, an agent who pulls accurate comps, a real estate attorney or title company, and an inspector for your due diligence. Your contractor relationship makes or breaks timelines and budgets, so vet references and never hand your whole project to someone you have not checked.

4. 4

   Find deals below retail, on purpose

   The MLS occasionally, but more often wholesalers, auctions, estate and probate situations, tired landlords, and direct-to-seller marketing. Retail-priced houses rarely flip profitably. Analyze many, offer on few, and let the numbers say no far more often than yes. Discipline at the buy is the entire edge.

5. 5

   Run the rehab like a deadline-driven project

   A written scope of work, a fixed contractor bid where possible, a draw schedule tied to completed stages, and a hard focus on the improvements buyers actually pay for (kitchens, baths, floors, curb appeal) over your personal taste. Every extra week is carrying cost bleeding your profit, so speed and scope control are money.

6. 6

   Budget for the surprises, always

   Hidden water damage, failed systems, permit delays, and a market that softens between purchase and sale. Carry a contingency (commonly 10 to 20 percent of rehab), model a lower-than-hoped sale price, and confirm the deal still profits under the pessimistic case. The flips that ruin people are the ones underwritten on the best case only.

7. 7

   Sell, then compound what the numbers taught you

   Stage and price to sell quickly (holding costs never sleep), work with a sharp listing agent or sell it yourself if licensed, and after closing do a brutally honest post-mortem: real all-in cost, real profit, real timeline. Reinvest what worked, kill what did not, and grow one clean deal at a time rather than juggling projects your capital cannot cover.

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