Flipping Houses: How To Flip A House Profitably

Flipping houses can be done in various forms so let us take a look at some of the most common methods.

Flipping houses involve buying a house, fixing it up and selling for a profit.

Buy and Hold involves buying a house to rent it. The rental term can either be a short term like Airbnb or a long term lease.

Live-In Flip is where you rehab a house but instead of immediately selling it; you live in it and then sell it. This method is advantageous from a tax perspective.

Define Your Area And Neighborhood

How To Flip A House: A Step By Step Guide

Research what kind of neighborhood you want to target. This will determine your price range, potential target buyers and also the level of rehab which would be needed.

Find The Property To Fix and Flip

Usually the properties which are great candidates for flipping will not be listed by real estate agents on Multiple Listing Services (MLS).

Determine The Rehab Budget

Rehab costs: This is the cost to actually fix up the property. J Scott in his book on Estimating Rehab Costs provides a great template to capture all details.

Determine The Buy Price

To flip a house profitably; you need to run the numbers accurately. Do not fall in love with a property and then adjust your assumptions to make it look profitable on paper.

For a house flip, find the comps for a fixed up house and work backwards to calculate the buy price. Don’t forget to include the Rehab cost and the hard money interest cost in addition to the profit.

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