Home flipping was all the rage during the past two decades, primarily thanks to reality TV and the mortgage rates reaching a historic low in early 2021.
Savvy and handy investors made quite the career of snatching up homes that needed some TLC, giving them a makeover, and selling them for a profit. Starting a flipping business is no longer the cash grab that it once was, unless you have serious capital. Home prices have soared, and mortgage rates have hovered in the high 6% since the start of 2025.
But for those with the means, flipping homes is still worth it. In fact, depending on where you buy property, the amount of money you can take in from flipping houses could be six figures!
For those looking to get started, let some experts in the financial and real estate industries fill you in on the best ways to get a house flipping business off the ground
How to start flipping houses
The first step might be the hardest: finding property!
While inventory is increasing, home prices are still fairly high in the most desirable places in the country. And that’s where you want to invest your money and time.
“Stick with the age-old adage of buying the cheapest property in the nicest neighborhood,” says Eric Workman, senior vice president of marketing at Chicago-based Renovo Financial, a private lender specializing in the real estate house-flipping space.
When you’ve settled on a locale, don’t pick just any old shack—look for a home with “good bones,” Workman says. Look for a property that’s structurally sound and has a decent roof, newer windows, and an HVAC system that’s less than 10 years old, as well as modern electrical and plumbing.
Next, an ideal flip should need only cosmetic changes such as new cabinets, countertops, flooring, and paint. Any other renovations will be more costly and cut into your profit on the property.
“These renovations can usually be done without the delays of permits, plus the upgrade costs will be relatively fixed, helping to eliminate unforeseen expenses,” says Workman.
How to find a house to flip
To be successful at flipping houses, you have to be ready to do the legwork.
While scouring online platforms could absolutely yield results, you’re better served connecting with a real estate agent who knows the area you’re looking in. The pro will be tapped into not only the most up-to-date listings, but also the most recent sales.
Think of the real estate agent as someone on the inside who knows how much money you could make with your property, once it’s spruced up.
Other options include exploring auctions for foreclosed properties on the cheap and tapping local resources like county assessors.
How much money can you make flipping houses?
Investors should set a goal of making a 10% to 20% return on their investment. So, how do you crunch the numbers?
For starters, find out what your fixer-upper will sell for once you’re done with it by looking at the sales price for similarly sized real estate in the same neighborhood that are move-in ready, says broker Bobby Curtis at Living Room Realty in Portland, OR.
Let’s say, for instance, that homes in tiptop shape in the area sell for $300,000. To get a ballpark figure for a run-down property, cut that price by three-quarters (75% of $300,000 = $225,000). Then subtract the cost of repairs (if repairs cost $30,000, that would be $225,000 – $30,000 = $195,000). That’s about the most you should pay for your flip without cutting too much into the money you’ll walk away with.
The best loan option for house flippers
As for financing a flip, it isn’t that different from buying a regular home. You’ll either pay cash or take out a mortgage—just consider going for a 10- or 15-year mortgage, which will offer a lower rate. If you’re right on the money, odds are you won’t own this house for long anyway.
You can also acquire a hard money loan, which is simply a short-term loan secured by real estate.
“It’s synonymous with a private investor,” says Don Hensel, president of North Coast Financial, which specializes in hard money loans. “A lender could be an individual, a group of investors, or a licensed mortgage broker who uses his own funds. This differs from a bank that uses money from its depositors.”
Getting a hard money loan is generally less of a hassle than a standard mortgage, and it’s especially popular with people flipping houses who prefer not to go through the hassle of taking out a 15- or 30-year mortgage on the property.
How fast should you flip a house?
Don’t kill yourself (or more accurately, flip yourself into an early grave) to rush your real estate flip. But also note, you don’t want this house sitting around for long.
Curtis recommends looking for a property that will take four to six weeks to renovate. A short deadline ensures you’ll buy and sell the house in the same housing market. Plus, owning a house for less than two months keeps costs like interest and taxes at a minimum.
This means that finding contractors who do quality work quickly is key to your success. For that reason, it’s crucial that you do your due diligence before you hire one: Make sure to meet with at least a few contractors, and get their license number, references, and real estimates of what they think renovations on the property will cost.
Keep an eye out for red flags. For example, contractors who ask for money upfront or in cash aren’t playing by the usual rules—and might be trying to take your money and run.
That said, you should accept the fact that the cost of repairs will almost always run over. As such, “you absolutely, positively must overbudget” so you have a financial cushion for those inevitable overruns, says Joseph Chiera of The Realty Cousins of Poughkeepsie, NY. Design backups will also help you solve your money problems.
“If you’re planning to use high-end hardwood flooring priced at $5 per square foot, have a nice backup at $2 per square foot,” he adds.
Home flipping checklist
Once you’ve purchased your fixer-upper home and you’re ready to start renovations, keep this checklist in mind:
- Turn on the utilities: You might not be sticking around, but you won’t be able to get much work down without electricity. Furthermore, turning on the water will alert you to any plumbing issues you might have. While you don’t need to worry about internet or cable, it’s good to make sure the hookups are available.
- Take ‘before‘”‘ pictures: Having documentation of the space before you get started could prove helpful to you and/your contractor as a reference guide.
- Apply for permits: Visit the local city hall and check with the zoning department to file for any paperwork necessary to start building. It’s better to do this before you start the renovation to avoid being hammered by fees.
- Order a dumpster: Out with the old, in with the new—but the old needs to go somewhere!
- Hire a contractor: If you’re not planning to do the work yourself, hiring a professional to get the job done is key. Evaluate what areas of your fixer-upper need the most attention, and look for a specialist in that area.
- Order materials: You can cut back on certain expenses by buying the materials yourself. We’re talking about paint, wood, or even plumbing supplies
- Get to work: The faster the work gets done, the faster you can flip. Check in daily with your contractor if you’re hiring outside help or set a work schedule for yourself, keeping as closely to it as you possibly can.
Once the renovations are complete, your next steps are focused on getting ready to sell
- Hire a real estate agent: Enlist the help of an agent who understands your goals and knows the area well. This pro will be key in helping you price accordingly, both for the area’s average and for your profits.
- Stage and furnish: While most new construction comes unfurnished, if your budget allows, most experts agree that setting the scene with furnishings helps potential buyers see themselves in the space.
- Have professional photos taken: Everyone has a camera on their phone, but having a professional take your listing photos will ensure that the property will stand out.
- Get ready to list: Talk to your agent about how/when to schedule showings and if you’re interested in hosting an open house.
Dina Sartore-Bodo contributed to this report.
