New to flipping business

[Sophie Wang]

Hi, I am doing Design-Build projects for clients and interested in flipping homes so I don't need to find new clients and give me more time flexibilities. I have around $400,000 to start the first investment and don't want to loseoney so I am asking good advises. How do I make profit being in high tax rate state-CA high hard money interest rate? I am hoping my previous remodel experience can help me. Thanks. 

[Stuart Udis]

When it comes to flips, you make your money on the acquisition. It doesn't matter how well you manage the construction, if the profit margin isn't in the opportunity you will not make money. Before you concern yourself with taxes and the cost of originating your debt you should really be focused on the acquisition. Since you appear to have construction management experience you may be suited to GC your own projects. This gives you an upper hand and if taxes are concern perhaps you should explore rental assets that require significant renovation budgets. This will allow you to realize cash flow through the construction management while not incurring the tax burdens you rightfully want to avoid.