I recently decided to start flipping houses as my full-time job. I’ve known for a while now that I wanted to make a career switch into real estate and was waiting for the right opportunity but decided I was tired of waiting and decided to go all in. I bought a 2-family house in Wakefield a couple years ago that I have been using as a house hack so I’ve had a little bit of experience but not much compared to what I will be doing now.
Currently I have around $50k of savings that I can invest and $300k in my 401k that I am very willing to use, either as a loan (I believe the max is $50k) or a full withdrawal (which should be a little over $200k after taxes & fees). I am looking into all options for funding though, including private money lenders. I think this is the biggest hurdle for me at the moment and the area I am most uncertain about. If anyone has any thoughts on this or general advice about getting into the house flipping business, please feel free to comment or reach out to me.
Specialist · NJ · Member since 2022 · 1k+ posts · 649 votes
1y
Flipping and Brrrring are two very different things. The Brrrr, since it is a long term strategy, it can overcome short-term overages. Flipping is a spot market investment and short-term changes to the market, overages, what have you. It can crush you.
The key to flipping is to flip when it is right to and when it is not, you don't even try.
Investors that flip for a living, I know about a dozen ppl that do it full time, they all pretty much operate the same way:
They have a private money guy that covers them 100% and rolls all payments into the payoff. They're in for zero. But since they are buying in cash it is off market deals, foreclosure deals, auction deals. They are using the strength of cash to buy a discount. They are in for less than the market buyers. When it comes to the rehab, either they are the construction piece and have it all in place, or they run their own subs sans any GC. They have the demo, mechanicals, roof, floors, paint, finishes, kitchen/bath remodel. they run their own projects. Their all-in project costs/ARV is always in the low 60s%, compared to a traditional investor who is hoping and praying for a project between 70% - 75% cost to ARV.
Brrrring and being wiling to not recoup 100% of your capital on the refi is a strategy that can work. Time can heal the money wounds of the purchase and rehab premiums. In 5 years, the property is worth 15% more, rent is 5% higher. You can get your head above water, eventually over time.
Flipping is a whole different ball game. Losing money is a real possibility unless you have a great eye for what can be flipped in what market during what kind of economic atmosphere.
The higher your project cost is, the more you need to worry about the x-factors. The cheaper your project cost is, the impact of the x-factors lessen and your probability to exit with profit heightens.
I've learned lots about flipping the the last few years. Between coordinating 40+ projects for clients, and being privy to the materials of many, many high priced seminars, I see that there is a science to this.
Your first step really is the purchase and you need to be in for under market, if it's a flip. Brrrrs can be bought on market because of the time bandaid.
Lender · Springfield, MO · Member since 2023 · 652 posts · 314 votes
1y
Finding a good deal source, buy-box, or a strong realtor who is knowledgeable on the area and what you are trying to do.
Otherwise, securing reliable funding is going to be your next hurdle. A lot of good lenders and brokers on Bigger Pockets but certainly being aware of who is financing in your area of interest with specific knowledge on amounts, leverages, and experience requirements to go along with rates.
Being up front goes a long ways, so talking to groups and have a good idea on what you are trying to do will really help.
Good luck though! Tons of good opportunities and never too late to jump in!
Finding a good deal source, buy-box, or a strong realtor who is knowledgeable on the area and what you are trying to do.
Otherwise, securing reliable funding is going to be your next hurdle. A lot of good lenders and brokers on Bigger Pockets but certainly being aware of who is financing in your area of interest with specific knowledge on amounts, leverages, and experience requirements to go along with rates.
Being up front goes a long ways, so talking to groups and have a good idea on what you are trying to do will really help.
Good luck though! Tons of good opportunities and never too late to jump in!
Happy to connect and help if it would be helpful.
There's definitely a lot of financing options and it is a little overwhelming. Trying to have as many conversations as possible and research as much as I can. Would love to connect and hear any thoughts you might have!
Little Rock, AR · Member since 2021 · 75 posts · 64 votes
1y
Im in Little Rock, Arkansas. Bought my first home in 1997, duplex. Lived in one unit and rented the other side. Rental side almost covered my entire mortgage. I was hooked! Still own that same duplex today, plus many more. So I think you are on to something!
I always buy value add, distress property. What I have always had good success with is going to local bank and getting a construction loan. Sometimes they will offer 80% loan of projected ARV (after repair value). They will take your list of repairs and provide to appraiser. Appraiser will come up with the ARV. Sometimes, if you are lucky, the purchase price of the home, plus your repair estimate combined will come in below the 80% ARV and you can get into the home with no money down and interest only for 1 year etc. Make your repairs and then either sell or refi the home to a 30 year if you decide to keep as a rental.
Of course, thats a best case scenario with no money down and a lot of things have to line up, starting with making a good deal on the buy! BUT, even still, if it doesnt work out in that scenario, you may get into it for less than 20% down.
So start with a local bank. Ive also had success with credit unions.
Im in Little Rock, Arkansas. Bought my first home in 1997, duplex. Lived in one unit and rented the other side. Rental side almost covered my entire mortgage. I was hooked! Still own that same duplex today, plus many more. So I think you are on to something!
I always buy value add, distress property. What I have always had good success with is going to local bank and getting a construction loan. Sometimes they will offer 80% loan of projected ARV (after repair value). They will take your list of repairs and provide to appraiser. Appraiser will come up with the ARV. Sometimes, if you are lucky, the purchase price of the home, plus your repair estimate combined will come in below the 80% ARV and you can get into the home with no money down and interest only for 1 year etc. Make your repairs and then either sell or refi the home to a 30 year if you decide to keep as a rental.
Of course, thats a best case scenario with no money down and a lot of things have to line up, starting with making a good deal on the buy! BUT, even still, if it doesnt work out in that scenario, you may get into it for less than 20% down.
So start with a local bank. Ive also had success with credit unions.
Thanks for the advice Brian. I haven't heard of this strategy before but I like it a lot. Will definitely give it a shot!
I recently decided to start flipping houses as my full-time job. I’ve known for a while now that I wanted to make a career switch into real estate and was waiting for the right opportunity but decided I was tired of waiting and decided to go all in. I bought a 2-family house in Wakefield a couple years ago that I have been using as a house hack so I’ve had a little bit of experience but not much compared to what I will be doing now.
Currently I have around $50k of savings that I can invest and $300k in my 401k that I am very willing to use, either as a loan (I believe the max is $50k) or a full withdrawal (which should be a little over $200k after taxes & fees). I am looking into all options for funding though, including private money lenders. I think this is the biggest hurdle for me at the moment and the area I am most uncertain about. If anyone has any thoughts on this or general advice about getting into the house flipping business, please feel free to comment or reach out to me.
Hi Ryan,
happy to share this advice with you, I’m a local Northeast guy in your area. Happy to connect and talk about a plan on what product would be successful for you!
Hi Ryan, I just moved out of Massachusetts in 2022. I still have many active contacts there if you are looking to stay local. Let me know what your needs are. I have qualified realtors, GCs, PMLs, inspectors, etc. You name it, I likely have someone trustworthy.
Hi Ryan, I just moved out of Massachusetts in 2022. I still have many active contacts there if you are looking to stay local. Let me know what your needs are. I have qualified realtors, GCs, PMLs, inspectors, etc. You name it, I likely have someone trustworthy.
Hey James - Thanks for the offer, I can definitely use any contacts / resources you have available! I have a great realtor that focuses on investment properties and helped me buy the multi-family I'm in now but he is the only resource I have at the moment. At the moment I probably need a GC and PML more than anything. Either way I'd love to connect and hear any advice you might have!
I am on the financing side of things and we work with a lot of new and seasoned flipper for financing options. There are quite a few options out there and each has their own specialties of what they do well and what they don't do well. Starting out, liquidity is usually one of the larger components for financing as most lenders will want to see that you have x amount of reserves available beyond down payment and closing costs. The reserve requirements vary greatly from lender to lender. Many also require seasoning and sourcing of these funds.
With no experience, most lenders will want to see 20-25% down on the purchase price, but there are some exceptions. We can often get 10% down for new investors based on FICO, subject property location, and ratios of the deal. The higher down payment can be very restrictive if liquidity is not sound.
Are you working with a mortgage broker who specializes in fix and flip or BRRRR lending?
I am on the financing side of things and we work with a lot of new and seasoned flipper for financing options. There are quite a few options out there and each has their own specialties of what they do well and what they don't do well. Starting out, liquidity is usually one of the larger components for financing as most lenders will want to see that you have x amount of reserves available beyond down payment and closing costs. The reserve requirements vary greatly from lender to lender. Many also require seasoning and sourcing of these funds.
With no experience, most lenders will want to see 20-25% down on the purchase price, but there are some exceptions. We can often get 10% down for new investors based on FICO, subject property location, and ratios of the deal. The higher down payment can be very restrictive if liquidity is not sound.
Are you working with a mortgage broker who specializes in fix and flip or BRRRR lending?
Cheers!
I have found a few hard money lenders that will work with new investors and only require a 10% down payment of the sale price while funding the entire rehab. I know there are probably some downsides that may take away from my return, like getting charged extra points, but at the moment it seems like the best option for me.
Lender · New Jersey, USA · Member since 2022 · 254 posts · 67 votes
1y
have you established a relationship with a reliable fix and flip lender? i find most investors doing fix and flips aren't getting the best terms they could be getting
have you established a relationship with a reliable fix and flip lender? i find most investors doing fix and flips aren't getting the best terms they could be getting
I have not yet I have researched a few but have yet to make contact. Working on narrowing my options and deciding on a couple that I am comfortable with
Rental Property Investor · Elmira NY · Member since 2023 · 143 posts · 143 votes
1y
start slow! You will learn new tricks and things you wish you had done differently with each flip. Im on house #7 (fix and hold though not flip) and while im happy with jumping in and spending money on the first few, I make the dollar go a lot further on the last few from learning from mistakes. I like Fix and flip loans. if no experience you might need to bring 15 - 20% down but they will prob cover most of your flip budget.
start slow! You will learn new tricks and things you wish you had done differently with each flip. Im on house #7 (fix and hold though not flip) and while im happy with jumping in and spending money on the first few, I make the dollar go a lot further on the last few from learning from mistakes. I like Fix and flip loans. if no experience you might need to bring 15 - 20% down but they will prob cover most of your flip budget.
I am also learning about fix and hold , as the young starter investor, do you think DSCR, construction loan, or what type of loan is relevant for the project?
start slow! You will learn new tricks and things you wish you had done differently with each flip. Im on house #7 (fix and hold though not flip) and while im happy with jumping in and spending money on the first few, I make the dollar go a lot further on the last few from learning from mistakes. I like Fix and flip loans. if no experience you might need to bring 15 - 20% down but they will prob cover most of your flip budget.
I am also learning about fix and hold , as the young starter investor, do you think DSCR, construction loan, or what type of loan is relevant for the project?
start slow! You will learn new tricks and things you wish you had done differently with each flip. Im on house #7 (fix and hold though not flip) and while im happy with jumping in and spending money on the first few, I make the dollar go a lot further on the last few from learning from mistakes. I like Fix and flip loans. if no experience you might need to bring 15 - 20% down but they will prob cover most of your flip budget.
I am also learning about fix and hold , as the young starter investor, do you think DSCR, construction loan, or what type of loan is relevant for the project?
If you are currently W2 or have two years tax return non W2 I would suggest a regular bank or credit union loan IF you can qualify. I was neither of those so loan 2 - 5 for me were DSCR. The points, Pre Payment Penalties (PPP) and fees are a bit of a pain but long picture looking it was definitely worth it for me. I haven't done a construction loan because I haven't built from grown up but the fix and hold loans worked well for me as well. Pretty much a DSCR loan without having to bring as much to close and they paid for my fix it part which was great. I would highly suggest not going that route until you have a few experiences under your belt because it is easy to go astray.
Hey Ryan — props to you for jumping in! Sounds like you're in a great spot to start, especially with some experience already under your belt. I remember the day I called it quits on the main job and focused on this business. Its a big leap, but a good one :)
From what you’ve got lined up, it seems like you’ve got two main paths:
Go high leverage — borrow with hard/private money, maybe use the 401k loan to supplement, and keep your cash as reserves. This lets you do more deals, but comes with more risk and tighter margins.
Be your own investor — use your own capital, either from savings or your 401k (ideally not a full withdrawal), and avoid lender fees and high interest. Less risk of overextending, but it limits how many deals you can do early on.
Neither path is “wrong,” it just depends on your comfort level with risk and speed. You could even do a mix — self-fund your first flip to learn the process, then start using leverage once you're more confident.
Keep us posted on what you go with — exciting stuff ahead! If you would like to talk more about either option, let me know! Happy to jump on a call
Hi Jeb - this is exactly what I was thinking. Just trying to figure out which on is right for me, still going back and forth as I weigh out pros and cons of each. I appreciate the positivity and would love to connect. I'm very excited about what the future holds but still have so much to learn.
I recently decided to start flipping houses as my full-time job. I’ve known for a while now that I wanted to make a career switch into real estate and was waiting for the right opportunity but decided I was tired of waiting and decided to go all in. I bought a 2-family house in Wakefield a couple years ago that I have been using as a house hack so I’ve had a little bit of experience but not much compared to what I will be doing now.
Currently I have around $50k of savings that I can invest and $300k in my 401k that I am very willing to use, either as a loan (I believe the max is $50k) or a full withdrawal (which should be a little over $200k after taxes & fees). I am looking into all options for funding though, including private money lenders. I think this is the biggest hurdle for me at the moment and the area I am most uncertain about. If anyone has any thoughts on this or general advice about getting into the house flipping business, please feel free to comment or reach out to me.
Not only is connecting with a lender important, sourcing deals with good margins can be difficult. It’s a good idea to go to some REIA meetups to connect with others in the areas so you can source deals. You can meet wholesalers and other investors who can share experiences, tips, and deals.
I recently decided to start flipping houses as my full-time job. I’ve known for a while now that I wanted to make a career switch into real estate and was waiting for the right opportunity but decided I was tired of waiting and decided to go all in. I bought a 2-family house in Wakefield a couple years ago that I have been using as a house hack so I’ve had a little bit of experience but not much compared to what I will be doing now.
Currently I have around $50k of savings that I can invest and $300k in my 401k that I am very willing to use, either as a loan (I believe the max is $50k) or a full withdrawal (which should be a little over $200k after taxes & fees). I am looking into all options for funding though, including private money lenders. I think this is the biggest hurdle for me at the moment and the area I am most uncertain about. If anyone has any thoughts on this or general advice about getting into the house flipping business, please feel free to comment or reach out
All you have to do is Google hard money lenders near me and set up a few meetings. You want to start slow and if you break even on your first flip you did well. The 3rd or 4th are the most dangerous, because you start to become confident, but have not crashed yet.
Flipping is a great side gig. You can work 8 hours in your W2, sleep 8 hours and still have 8 hours plus the weekend to work on your flip!
Specialist · NJ · Member since 2022 · 1k+ posts · 649 votes
1y
Flipping and Brrrring are two very different things. The Brrrr, since it is a long term strategy, it can overcome short-term overages. Flipping is a spot market investment and short-term changes to the market, overages, what have you. It can crush you.
The key to flipping is to flip when it is right to and when it is not, you don't even try.
Investors that flip for a living, I know about a dozen ppl that do it full time, they all pretty much operate the same way:
They have a private money guy that covers them 100% and rolls all payments into the payoff. They're in for zero. But since they are buying in cash it is off market deals, foreclosure deals, auction deals. They are using the strength of cash to buy a discount. They are in for less than the market buyers. When it comes to the rehab, either they are the construction piece and have it all in place, or they run their own subs sans any GC. They have the demo, mechanicals, roof, floors, paint, finishes, kitchen/bath remodel. they run their own projects. Their all-in project costs/ARV is always in the low 60s%, compared to a traditional investor who is hoping and praying for a project between 70% - 75% cost to ARV.
Brrrring and being wiling to not recoup 100% of your capital on the refi is a strategy that can work. Time can heal the money wounds of the purchase and rehab premiums. In 5 years, the property is worth 15% more, rent is 5% higher. You can get your head above water, eventually over time.
Flipping is a whole different ball game. Losing money is a real possibility unless you have a great eye for what can be flipped in what market during what kind of economic atmosphere.
The higher your project cost is, the more you need to worry about the x-factors. The cheaper your project cost is, the impact of the x-factors lessen and your probability to exit with profit heightens.
I've learned lots about flipping the the last few years. Between coordinating 40+ projects for clients, and being privy to the materials of many, many high priced seminars, I see that there is a science to this.
Your first step really is the purchase and you need to be in for under market, if it's a flip. Brrrrs can be bought on market because of the time bandaid.
Ryan, seriously respect the move — diving in full-time is bold, and you’re clearly thinking things through the right way. House hacking is already a solid foundation.
From what you said, you’re in an excellent position: $50k liquid + a 401k you’re willing to leverage = you’ve got real buying power — the key now is just deploying it strategically.
I’ve worked closely with a few newer full-time flippers who were in a similar position — had the capital but weren’t sure whether to go all in with personal funds or use leverage to scale faster (i.e. hard/private money paired with a cushion of your own cash).
The right lender can walk that line with you — showing how to structure deals that protect your downside while still letting you move quickly. It’s not one-size-fits-all — and that’s where having a relationship-based lender makes all the difference versus the more rigid national options.
Happy to share what’s worked well for other first-time full-time flippers I’ve supported. DM me if you’d like to see a few examples or talk through deal structures — even just as a sounding board.
I recently decided to start flipping houses as my full-time job. I’ve known for a while now that I wanted to make a career switch into real estate and was waiting for the right opportunity but decided I was tired of waiting and decided to go all in. I bought a 2-family house in Wakefield a couple years ago that I have been using as a house hack so I’ve had a little bit of experience but not much compared to what I will be doing now.
Currently I have around $50k of savings that I can invest and $300k in my 401k that I am very willing to use, either as a loan (I believe the max is $50k) or a full withdrawal (which should be a little over $200k after taxes & fees). I am looking into all options for funding though, including private money lenders. I think this is the biggest hurdle for me at the moment and the area I am most uncertain about. If anyone has any thoughts on this or general advice about getting into the house flipping business, please feel free to comment or reach out to me.
Hey @Ryan Butler, congrats on making the jump to FT!
A few thoughts - prudent underwriting will always be the first step. With a simple calculator you can quickly assess whether deals pencil. Understanding market dynamics is the next layer. Are properties in the area appreciating or not? Is the population growing? etc.
Most importantly, you need a strong and reliable GC, especially as a new flipper. This is the toughest piece IMO as it takes time to build trust.
Happy to chat specifics anytime - and if you're in the market for a property feel free to run it through the Instant Quote tool on our site to see what terms you qualify for!
