3 Reasons Beginners SHOULD NOT Flip Houses

3 Reasons Beginners SHOULD NOT Flip Houses

1 min read
Matt Faircloth

Matt Faircloth, co-founder and president of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, N.J., is a developer and owner of commercial and residential property with a mission to “transform lives through real estate.” DeRosa creates partnerships to finance select real estate investments and has a proven track record of providing safe, profitable investment opportunities to their clients.

Experience
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 hundreds of units in residential and commercial assets throughout the East Coast. Under Matt’s leadership, DeRosa has completed tens of millions in real estate transactions involving private capital, including fix and flips, single family home rentals, mixed-use buildings, apartment buildings, and office buildings.

Matt is an active contributor to the BiggerPockets Blog and has been featured on the BiggerPockets Podcast three times (show #88, #203, and #289). He also regularly contributes to BiggerPockets’ Facebook Live sessions and teaches free educational webinars for the BiggerPockets Community.

Matt authored the Amazon Best Seller Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money. The book is a comprehensive roadmap for investors looking to inject more private capital into their real estate investing business and is a must-read for anyone looking to grow their business by using private lenders and equity investors. Kirkus, the No. 1 trade review publication for books, had this to say about Raising Private Capital: “In this impressively accessible introduction to a complex subject, Faircloth covers every aspect of private funding, presuming little knowledge on the part of the reader.”

Matt and his wife Liz live in New Hope, Penn., with their two children.

Education
Matt earned a B.S. in Industrial and Systems Engineering with a minor in Business from Virginia Tech. (Go, Hokies!)

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New investors seem to really love the idea of flipping houses. (Thanks, HGTV.)

And I get it. It seems glamorous. It seems simple. It seems like it all happens in a snap.

But “seems” is the keyword here.

While I do understand the appeal—I’ve done dozens of fix and flips myself—here’s a little forewarning.

Far too often real estate newbies are shocked to find out the process is not at all like what you see on TV.

There are dozens of ways to invest in real estate. This just happens to be one I wouldn’t recommend starting out with, and here’s why.

Related: Fixing and Flipping: It’s a Numbers Game

Hold Off on Flipping if…

  1. You’re working alone. Fix and flips require a team!
  2. You don’t have extra money. Fix and flips often introduce costly surprises!
  3. You don’t know the market well. Choosing a good location is key!

Of course, there are a million reasons you should be flipping, but find out why these three elements can quickly turn a fix and flip into a project gone wrong.

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Are you planning to do a fix and flip? Or have you done it already? What’s your take on the process? 

Let me know in the comment section.

New real estate investors seem to really love the idea of flipping houses. (Thanks, HGTV.) While I do understand the appeal—I've done dozens of fix and flips myself—here's a little forewarning. Flipping happens to be one method I wouldn't recommend starting out with. Here's why.