Don't FLIP when I say you need $100K+ to get started in fix & flip...

[Dan Gandee]

PREFACE: My business partner and I bring a combined 40+ years of experience across construction, fix-and-flip operations, multifamily, and investment real estate. We’ve worked with everyone from absolute beginners to seasoned experts. We’ve run both in-state and fully remote out-of-state flip operations. We’ve worked with trust funds, REITs, and everything in between. We’ve seen almost everything that can go wrong… and we’ve personally bailed out more than a few investors who were on the edge of hard-money foreclosure. I’ve watched people lose their homes and their assets because of one bad decision. I’ve also watched kids become millionaires within a few years by doing things the right way. We’ve seen the entire spectrum, and I want to share this before I jump into the post. Consider this a warning for any beginner stepping into this space of Fix & Flip. 

LET'S GET INTO IT: I’m going to double down on something that ruffles feathers every single time I say it: if you don’t have at least $100,000 liquid and accessible, you’re not ready to flip houses. And no — “just find the deal and the money will come” is NOT a business plan. People love repeating that line because it sounds inspiring, but in the real world it falls apart fast so...Let’s talk about both sides of this.

The harsh reality nobody wants to hear is that flipping will expose every weakness you have i.e. financial, operational, emotional, all of it. You can buy what looks like the “perfect” deal on paper and still get crushed by bad contractor bids, material delays, holding costs stacking on you every month, blown timelines, loan extensions, septic failures you didn’t even know were possible, mold hiding behind drywall, constant change orders, buyers backing out at the last minute, inspection repair addendums that destroy your margin, permitting nightmares, and labor shortages that grind everything to a halt. Any single one of those things can eat your profit alive if you don’t have reserves. I’ve seen good, hungry investors get completely wrecked because they were running too thin and didn’t have the cash to survive even one or two bad breaks. This business doesn’t knock... it kicks the door in. $100K isn’t a luxury in flipping. It’s survival.

And that brings us to the myth: “Just find the deal and the money will come.” This gets repeated by gurus and influencers who don’t actually operate in the field. Money doesn’t chase rookies. Everybody says they’ll fund you until you bring them a real deal and suddenly it becomes obvious you’ve never flipped before, don’t know how to estimate repairs, don’t understand timelines, can’t structure draws, don’t have liquidity, no insurance, no track record managing contractors. The “I’ll fund your deal!!!” energy disappears real quick once they realize you’re not as low-risk as they hoped. Real money wants one thing above all else: safety. If you don’t have capital, you’re unsafe. If you can’t survive the project’s worst day, you’re unsafe. If your margin is thin, you’re unsafe. Money doesn’t chase unsafe operators; it chases risk mitigation, not optimism.

Even if you do find a legitimately good deal, you still need capital to operate it. Finding the deal isn’t even half the battle. You still need cash for the first draw, cash for materials, cash for surprises, cash for extensions, cash for contractors who don’t wait, cash when the lender runs slow, and cash when the project drags longer than you expected. OPM doesn’t cover the chaos. Your reserves do.

And here's another truth: private lenders have options. They're not waiting on you. People with money get pitched deals constantly...literally daily, hourly, all the time. Your "good deal" isn't rare. It's one of many. And if you can't operate the project, the deal itself doesn't matter. Execution beats acquisition every time. You can walk into a 65% ARV purchase and STILL lose money if you mismanage the contractor, allow scope creep, blow your timeline, rack up extensions, over-build, under-build, botch the listing, or end up relisting after a bad inspection. Money doesn't care about deals. Money cares about operators. And if you're inexperienced, then you need capital to compensate for your learning curve.

You’re going to hear rebuttals from people who don’t like this message. 

Rebuttal #1 is always: “I know people who flipped with no money!” Cool. I know people who won blackjack with $50. Doesn’t make it a wealth plan. For every story like that, there are a hundred investors who lost earnest money, blew their holding costs, got underwater on repairs, had a partner bail, had a GC ghost them, tanked their credit, or walked away with nothing. You hear the survivors AND not the casualties. 

Rebuttal #2: “My lender said they’d fund everything!” They said that when it was hypothetical. They get way pickier once real money’s on the line. And even if they fund repairs, you STILL need liquidity, surprise money, holding cost money, delay money, and cash for stuff lenders don’t reimburse. Lenders don’t fund chaos. Chaos is expensive.

Rebuttal #3 is: "I'll just raise private money!" Yeah, raising money for your first deal is one thing. Raising money for your first screw-up is another. Most rookies can raise capital once. They just can't raise it twice. And Rebuttal #4: "I'll JV with someone!" That's fine, but YOU still have to bring real value. Your value isn't "finding the deal." Anyone can find deals. Your value is running construction, managing timelines, controlling budget, reducing risk, and executing cleanly. If you can't do that yet, then you need reserves more than anyone.

So how do you actually get to $100K? There are a few tactical ways. 

One: partner with money and not someone flaky or emotional, but someone who wants returns and stability. You operate the deal, they stabilize it. 

Two: partner with a GC. Honestly, this reduces risk more than almost any other structure. When the GC has equity, they don’t change-order you to death or disappear when the job gets tough. 

Three: break the $100K into buckets; maybe $30K cash, $30K HELOC, $20K business LOC, $20K a partner brings. It still counts as accessible capital. And four: start with easier projects. Don't open your career with a full-gut foundation shift septic disaster. Do cosmetics, predictable timelines, simple scopes. Learn the craft before you take on monsters.

Finally, you need the best agent listing your properties. Your agent can make or break your exit. The right agent does a pre-list inspection so you can fix issues before buyers weaponize them. They handle SPDS correctly so your disclosures don’t cause fallouts or relist nightmares. They position the property as a product  with good photos, staging, pricing strategy, timing, everything. They manage buyer expectations during inspections, appraisal windows, finishing touches. And they protect your margin. The discount agent who “saves you” 1% usually costs you far more in lost net because they don’t know how to run a clean exit.

This business isn’t about “finding deals.” It’s about surviving deals long enough to get good at them. And survival requires cash, reserves, margin, risk mitigation, partnerships, a good agent, and some humility. Flipping will humble you or it will reward you and it all depends on whether you show up with optimism… or with actual capital.

Good luck out there and if anyone needs any guidance just shoot me a message!

[Matthew Paul]

@Dan Gandee This is the best advice on flipping I have ever seen posted here . Its all 100% true . Everything you mentioned that could go wrong I have seen happen to people in my 40 years in contracting .