3 Reasons Beginners Should Not Flip Houses

by | BiggerPockets.com

Flipping houses can be a great way to make a relatively quick profit, but these projects aren’t for everyone. Wondering if you’re equipped to take on a flip? First, check out these reasons why you might be horribly unprepared for a full-on rehab project.

You Should Not Flip Houses if…

  1. You’re operating by yourself. You absolutely need a solid team when taking on a project of this size, including a top-notch contractor. You can get away with a mediocre handyman for everyday repairs, but not flipping an entire home.
  2. You don’t have enough reserves. Fix and flips are full of surprises; be sure you have enough money to weather the storm (because you will encounter difficulty).
  3. You don’t know your market well enough. Without in-depth market knowledge, you won’t be able to gauge what finishes to use and how quickly the end product will sell.

Don’t get me wrong—there are a million reasons you should be flipping houses. Just be sure you know what you’re getting into and have a solid support system to ensure you’re able to overcome the unexpected.

What are some other reasons you shouldn’t flip houses?

Weigh in with a comment!

About Author

Matt Faircloth

Matt Faircloth, Co-founder & President of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, New Jersey, is a developer and owner of commercial and residential property with a mission to “transform lives through real estate." Matt, along with his wife Liz, started investing in real estate in 2004 with the purchase of a duplex outside of Philadelphia with a $30,000 private loan. They founded DeRosa Group in 2005 and have since grown the company to owning and managing over 370 units of residential and commercial assets throughout the east coast. DeRosa has completed over $30 million in real estate transactions involving private capital including fix and flips, single family home rentals, mixed use buildings, apartment buildings, office buildings, and tax lien investments. Matt Faircloth is the author of Raising Private Capital, has been featured on the BiggerPockets Podcast, and regularly contributes to BiggerPockets’s Facebook Live sessions and educational webinars.

4 Comments

  1. brian ploszay

    Yes, good points. But everyone has their first project. I prepared for mine. I volunteered for two years doing construction on the weekends for Habitat For Humanity. I watched construction videos. I had a good realtor.

    I was very green, but it grew from there. Today, I don’t flip, but buy and hold. Similar skills though for construction.

  2. Andrew Syrios

    For the most part I would agree, but would certainly make exceptions, for example if it’s 1) a small rehab, 2) you have financial reserves and 3) have some knowledge of real estate or experience with it, then I would say starting with a flip isn’t a bad idea. Just know that like Josh Dorkin says, “you always [ed: usually] lose money on your first flip.”

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