Flipping Houses

3 Reasons Beginners SHOULD NOT Flip Houses

Expertise: Real Estate Investing Basics, Real Estate Deal Analysis & Advice, Mortgages & Creative Financing, Landlording & Rental Properties, Business Management, Personal Development, Flipping Houses, Commercial Real Estate
161 Articles Written
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New investors seem to really love the idea of flipping houses. (Thanks, HGTV.)

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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.

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.

Matt Faircloth, co-founder and president of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, New Jersey, i...
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    Larry Vestall Flipper from Aledo, Texas
    Replied over 1 year ago
    Location! That says it all. We bought an abandoned old Victorian home spent 16 months renovating it back to gorgeous! Thinking it would sell itself. But 90 days later and it’s still sitting on the market why because we didn’t know the area at the time of purchase we just saw a 2500 sqft house for 5k. Can’t pass that up. But 150k later and 16 months of remodeling as my husband did most the work without a solid team. And we are still waiting for it to sell. Why? Because of the area!!! Not everything is always a good deal. No matter what the price is.
    Ed B. Real Estate Investor from Sacramento, CA
    Replied over 1 year ago
    Reminds me of the 1967 Mercedes Benz 200 diesel car I bought about 1988. It needed restoring, which I thought would be a good investment since Merceds Benz cars generally have a good reputation and probably hold their value, right? Wrong. Some models might, but not the 1967 200. I sunk $3500 into restoring it,then was unable to sell it. What a dog! It’s never enough to simply clean and paint something and think it’s going to be worth more, whether’s it’s houses or cars. Always make sure the asset ha demand and appeal from potential buyers before you spend a dime on it.
    Jerry Maze Wholesaler from Portage, MI
    Replied over 1 year ago
    I am sorry to hear this has happened… have you considered leasing it out with a large non refundable security deposit and a separate option the purchase?
    Brenda Herman from Lithonia, Georgia
    Replied over 1 year ago
    If not flipping what do you suggest for a new beginner-wholesaling? There just seems to be something backhanded about wholesaling; that is not telling the seller that you’re not actually buying their property but instead selling it to someone else
    Jerry Maze Wholesaler from Portage, MI
    Replied over 1 year ago
    When I submit an offer I disclose that National REI Group, LLC , buyer reserves the right to assign it’s intetest in this contract to any person, corporation, or entity which it may designate. Also, I never sign under my name alone … signature is as follows buyer: Jerry Maze, Managing Member, National REI Group, LLC and/or assigns. That amounts to full disclosure.
    Ryan Wittig Real Estate Investor from Boston, MA
    Replied over 1 year ago
    Great post Matt. Many sins were forgiven due to rising prices from 2011-2017/2018. The market has shifted (at least in the Boston area) and flipping/renovating definitely requires all three of the items you mentioned, but most importantly, you have to buy the right deal….
    Denise Graves from Victoria, BC
    Replied over 1 year ago
    Matt, Thanks for this post and video! Knowing the market, having a team and some extra money are all key… Having time is also important. From surprises that come up to things taking longer than expected – if you haven’t budgeted extra time, or don’t truly have the time to manage the project, it can result in lost money with carrying costs. It also adds an extra level of stress when there’s pressure to manage the project or do some of the work as well as the everyday life stuff we need to do. Will be sharing this 🙂 Denise and Sean
    Tequila Huffman
    Replied over 1 year ago
    Hi Matt, I want to get into flipping houses but I’m a single parent with not much additional income. I have friends that are in construction and willing to help me do the work on properties. I’m pretty handy myself but these comments terrify me! I live in Jacksonville, FL and construction has been consistent for the last ten years that I’ve noticed. How do you suggest I get started? Thanks Tequila