Flipping Houses

7 Things I Desperately Wish I Had Known When I Started Flipping Houses

Expertise: Landlording & Rental Properties, Personal Development, Real Estate News & Commentary, Business Management, Flipping Houses, Mortgages & Creative Financing, Real Estate Deal Analysis & Advice, Real Estate Wholesaling, Personal Finance, Real Estate Marketing, AskBP, Real Estate Investing Basics
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(This post was done in both text and video format (at the bottom.) Take your pick!)

When I first decided to flip houses, I was a bit arrogant.

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I thought, “How hard could this really be? I mean, it’s just like the TV shows, right?”


I've spent the last decade buying both rental properties and doing house flipping, and I've learned a LOT. Sometimes I wish I could go back and give myself some advice. But I can't. However, I can do the next best thing: I can share that advice with you.

Therefore, in this post I give you seven things I desperately wish I had known when I started flipping houses.

Single Family Rental House

**Hey you: Are you interested in house flipping? If so, don’t miss this week’s BiggerPockets Webinar titled, “How to Analyze a Fix and Flip Deal (And Avoid Getting Burned!)” Why? Because (as you’ll see in this post) knowing how to do the math is one of the most important steps in ensuring you’ll make a big profit. Sign up now to hold your spot! OK, back to the post!

1. The Flip Doesn’t Begin When You Buy It

The first thing I wish I had known when I started flipping houses is that work doesn’t begin when you buy the property. It actually starts before that.

No, I’m not talking about breaking into the house and removing walls.

I’m talking about the prep work.

You see, what most people do (and I did for many years) is wait until the day after closing and then start planning for the flip.

Sure, that works, but you are missing out on some valuable time that could help your entire flip move faster!

During this "due diligence process," you can use the time to line up contractors, create an incredibly detailed scope of work, open up a checking account for the property, pick out materials (though I would wait to actually buy them until closing), and more.


2. The Scope of Work is Unbelievably Important

Perhaps the most important document you’ll use during the entire flip process is known as the “scope of work.”

Essentially, this is a detailed list of every single item that needs to be rehabbed in the home.

When I started flipping houses, I would jot down some notes as to what needed to be done — but it was far from complete.

Related: The 7 Commandments of Choosing a Profitable House to Flip

I figured, “Eh, what’s the purpose of getting too detailed? Whatever problems we find are going to come up anyway, and I’ll just have to fix them. So who cares if they are written down? It’s not a big deal, right?”

Wrong! It’s a huge deal!

Because the more detailed your scope of work is, the more smooth and on-budget your entire flip will be. When you know everything about the property, you can get more accurate estimates from contractors, schedule people at the right times, reduce the number of “change orders” the contractors will try to charge you for, and reduce your stress considerably.

The scope of work is like a road map — it’s easier to follow when it’s detailed.

3. Cheap Doesn’t Mean Good Deal

Many of the houses I have flipped I should not have.

Because I bought them because they were cheap, not because they were a good deal.

There is a difference — and understanding that difference is the thing that separates the winners from the losers in house flipping.

Some cheap houses are cheap for a reason. Perhaps it’s in a bad neighborhood. Perhaps it needs too much work. Perhaps there are environmental reasons for its price, such as lead-based paint or asbestos.

Whatever the reason, remember: Cheap doesn’t necessarily mean it’s a good deal.

4. You Make Your Money When You Buy

Once you’ve purchased a house, your profit is already capped at a certain point, and it’s not going any higher. Therefore, if you pay too much for a property going in, it’s unlikely you’ll ever get out with the profit you wanted.

You can't magically make the house worth more than it's going to be worth. The after repair value isn't going to change no matter how cute the paint is.

Therefore, always do your math CAREFULLY when buying a flip. Never buy on emotion, but buy because the math shows you are going to make a profit.


5. Dealing With Contractors is the Hardest Part

I firmly believe the most difficult part of flipping is dealing with the contractors.

You might find a great deal, might have incredible financing, and it might be in a great neighborhood.

But if you have horrible contractors or simply don’t manage your contractors correctly, you’ll struggle and maybe even lose money.

Therefore, don't think of "finding a contractor" as a quick and easy task. Put an incredible amount of time, effort, and due diligence into hiring the best contractors.

The more work you do up front finding and vetting contractors, the better your flip will go.

For more on my best tips for finding contractors, be sure to check out my post, “The Ultimate Guide to Finding an Incredible Contractor.”

6. It’s More Expensive Than You Think to Rehab a Property

One of the most painful lessons I’ve had to learn over and over and over in my business is this: It’s far more expensive to rehab a house than you might initially think.

Related: 5 Smart Ways to Reduce Your Fix and Flip Expenses

This is especially true for people who are “handy.”

I mean, I know that it would take me about four hours to paint a big room, including trim. So when I think about hiring a contractor, I think “OK, so if they are around $30 an hour, then I should probably budget around $120 for paint.”

Then I’m shocked when all the bids are north of $400! Why? There are a lot of reasons, including:

  • Me being optimistic on how long it really takes to do a task
  • Me believing good contractors ever work for $30 an hour
  • Not counting for the contractor’s “overhead”
  • Greedy contractors

Now, when I estimate how much work something takes to get done, I always overestimate everything — and then add even more.

I’d rather estimate too high than underestimate and lose money.

7. Flipping Houses is Not Easy — But It’s So Worth It

I first got into house flipping because of the TV shows.

It just looked so fun and easy. And it IS fun — but it definitely ain’t easy!

Flipping houses successfully requires a lot of patience, practice, skills, negotiation, dealing with people, budgeting, guiding, managing, and more. It’s a lot of work!

Honestly, in the beginning, had I known the truth about how much work it would be, I don’t know if I would have had the guts to do it.

But I’m so glad I did.

Every flip is unique, but each time I get better. Each time I learn more, and my “mental toolbox” is filled with more skills, more ideas, and more strategies for reducing my stress and improving the process.

If you are looking to get into house flipping, don’t let the fear of the unknown stop you. But don’t walk in blindly either. Learn all you can, ask a lot of questions, and find out about the mistakes others have made.

Then, go out there and crush it!

[Oh, and come join me for the next BiggerPockets Webinar, “How to Analyze a Fix and Flip Deal (And Avoid Getting Burned)“!)]

Flippers: What harsh lessons have you learned through your flipping experiences?

Let me know with a comment!

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He is a nationally recognized leader in the real estate education space and has tau...
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    David Roberts from Brownstown, Michigan
    Replied over 4 years ago
    Brandon thanks for the article. I have a question for you specifically. You have a lot of units that you hold. Why do you choose to flip when you could just add to your hold count? And, if its a math decision such as “if i can make X% flipping it i will flip it”, what is your math reason? Ive been struggling with my direction lately. I got into this business wanting to hold everything, and have bought a few holds. But then there’s a great appeal to flipping and taking the large payday today and doing 2, 3, 4 of those at a time. Anyway, I would just like to hear your thoughts.
    Brandon Turner Investor from Maui, HI
    Replied over 4 years ago
    Hey David, great question. And it’s not always easy – almost every property I flip I think “hmmm… i really should just keep it.” My main reasoning though is – I want to keep flipping enough that I can use the profit as down payments on further rentals. Sure, I can do “no and low money down” deals – but they take a lot more effort. So if I can make a “quick” $20,000 on a flip and put that on a rental, it makes sense. Also, the flipping helps pay for the marketing to get the deals. Hope that helps some!a
    Curt Smith Rental Property Investor from Clarkston, GA
    Replied over 4 years ago
    David, high profit flips are in the upper price range of the sweet spot in a given area. $175k, $225k, $275k etc. No sane landlord would buy at that price for a rental. Good rental areas != good flip areas. Rarely is there much over lap because of the 1% rule for landlording to make decent cash flow. I don’t do flips and we are “seasoned”. We believe flips are extremely difficult especially in hot markets like Atlanta where MAO is well WELL under where the houses sell. We stick to our rental areas adding here and there at price points we know make good cash flow. The list of reasons why flipping is tough includes Brandon’s issues and a dozen more. Right down to the insane issue of what color to paint to appeal to this years crop of Millennials and their nature of picking apart a house for nits and nats. Wrong color, wrong granite, not viking vs GE stainless. LOL Bless those who can make consistent and good money at flipping!!! Hats off to you folks. I do NOT consider $20k profit “good money”. One mistake, market swing and you’ve lost money. I see flippers in my REIA here in GA working on “prayers” and good luck to turn profits after the sell side closing and paying off all CC / debt.
    David Roberts from Brownstown, Michigan
    Replied over 4 years ago
    Yea, i guess i didnt thin that thru. I agree it doesnt make sense to hold something most times in thar upper range, but it would seem on the lower range what works for flip should work for hold and vice versa (90-125k ARV range). 25% return in 4-6 months seems like good money. 20k on a 250k flip does not, i agree.
    Account Closed Investor from Atlanta, Georgia
    Replied over 4 years ago
    Hey Brandon! I am ready to get started. Like, yesterday! I don’t need the income to live on so I can be discerning, I have cash of my own to invest, and passion for doing my first flip. With that being said, I’m paralyzed by the “gathering my team” so to speak. It isn’t because there is nobody to choose from, it’s that there are so many people TO choose from! I don’t know who to trust; who to choose as a lender, how to find an agent that will provide me access to MLS, etc. I have become a member of the REIA but there are so many different chapters I don’t know which one to join! I have lived here for 18 years, and and familiar with the area. So do I just cold call a lender first so that when I find a property I can act on it quickly? I have only worked with lenders when buying more expensive ($500k+) houses in this area, which were my personal residences, but I don’t know if these are people who would bother with a small $ flip. Any help would be greatly appreciated! You’re site is amazing and has given me hope!
    Brandon Turner Investor from Maui, HI
    Replied over 4 years ago
    Hey Liz – I hear ya! It can be a bit overwhelming. My best tip: Find someone semi-local who is already doing this (http://www.BiggerPockets.com/meet might help) and ask them for referrals. Then trust (but verify) them. And start taking little steps every day. 5 minutes a day can really add up to monumental change over time. And when you do your 10th flip… let me know and we’ll get you on the Podcast to tell your story!
    Astrid Van Boom from HUNTSVILLE, AL, Alabama
    Replied over 4 years ago
    Hi Brandon I need some advise on buy and flip deals. I have a few or rather a lot of things that might count against me to actually do these kind of deals. Located in New Zealand,with very little to no money, mo experience, is this seems to be my only option to start of with. I take note this might actually be the hardest option. Any case, I would like to know, who pays the realtor who is finding me deals to buy and flip. Is this something I should’ve asked her at the beginning, as well as how much? All formulas thus far says the seller pays the real estate agent, and if another real estate agent is involved,they split the 6% commission? I don’t pay anyone? I have been doing my maths on all the listings I get sent, but calculations most of the time shows equity is very low. Many times the seller still owes 70% and more on the house and my calculations: ARV x.70% – 20%(average repair estimate) = price I sell to cash buyers – $2,500(conservative profit) my MAO is many times far below the asking price. Is it worth looking at properties which have very low equity. although in very hot neighborhoods, and asking price is within the price range for houses in the area? Thanks
    Jerry Padilla Lender from Rochester, NY
    Replied over 4 years ago
    Great post…. Not only have I experience overpriced contractors, but ones that do terrible work.
    Replied about 4 years ago
    Just recently got myself into flipping house for investment again after years of hiatus. Thanks for the great articles of flipping house lessons. Really help me to get a good guide on real estate flipping house investing to avoid the hassles or troubles of it. ::2 Thumbs Up::