So You Want To Flip Houses?!

[Steven Luttman]

SO YOU WANT TO FLIP HOUSES?!

5 Lessons From A 1st Time Flipper

During the summer of 2025 I decided to give house flipping a shot. Not a totally foreign activity, as I’ve overseen many apartment renovations over the years as a multifamily investor. Turns out, these activities are not the same! Here are five lessons I learned that may help you

1) It will take longer than you think: While peeling back layers of the onion it was discovered a bedroom wall needed rebuilding from scratch. Add in a plumber who walked off the job and a mason who cancelled 1 day before starting, and the timeline was pushed out a full month. Unless you plan on doing the renovation completely yourself, deadlines are largely out of your control. Having a plan B and C for each role isn’t excessive, it’s mandatory.

2) It will be more expensive than you think

Out of the dozen plus professionals involved, not once did I hear “Good news Steve, it’s less expensive than we thought!” When the building is old and the renovation is significant, you better believe some of those original quotes are going to balloon in size. The best mechanism to limit your downside is by completing as much investigation as possible during your due diligence period. A plumbing, well and septic inspection all cost me money, but equipped me with evidence to negotiate a price reduction and help build a more accurate renovation budget.

3) What makes you special?

Every established house flipper in the area is competing against you. As someone new to the game, how can you win? Are you able to:

- Source deals others aren’t aware of

- Secure better financing terms

- Reduce costs by taking on tasks instead of hiring out

- Pursue opportunities others won’t

Don't forget that whether the property is on the MLS, auction or from a wholesaler, it is available to the masses. If you're buying it, you're saying you see something everyone else passed on.

4) Liquidity is everything

The house owes you nothing. All facets of the renovation can turn into worst case scenarios. The town can deny building permits. Contractors can (and likely will) ghost, and it can take two months to find a buyer instead of your planned two weeks. You are buying distress, whether that means the property condition or the seller’s financial situation. Running out of money means you are now someone else’s opportunity for distress. Identifying avenues of credit before they are needed is critically important.

5) Try It

Providing the community safe quality housing is a noble endeavor, but being able to improve your own financial circumstances by doing so is even better. The list of winners when a project goes well is extensive. Contractors can put food on their table, towns receive additional tax revenue from increased assessments, agents/lenders/attorneys all collect their fees, vendors are able to sell their materials and Uncle Sam lining his pockets come tax time are just some of the groups who benefit. You’ll be challenged because it’s not as fun as it looks on T.V….but you should still try.

[Bruce Woodruff]

Good points, @Steven Luttman...! I like #3 - "What makes you so special"? Lol.

I used to think I was special......a working General Contractor with a full crew and a bevy of trusted sub-contractors. And the ability to quickly walk a property and come up with a pretty solid rehab budget! Plus a money partner with deep pockets! How could that not be an unbeatable combination? Lol, nobody cares....and Mr. Murphy is always waiting in the wings for all of us....I even lost money once, you'd think that was impossible!

I saw dozens of Mom 'n' Pop investors wandering around properties during open houses, and while I was crawling underneath, getting in the attic and opening up the main panel, I would hear the wife talking about paint colors.....I knew they were going to overbid on the house and then get killed on the deal. Sure enough, I would figure my numbers and bid (Let's say) $325k, and then find out that the winning bid was $450k. That would be over my entire budget! So they were starting out in the Red.....

And Flippers are especially vulnerable, they have a super-tight budget and schedule - usually just a few months to find, fix and get back on market.

I'm not sure why anyone would want to be a flipper...except it's kinda fun, y'know with the thrill of the chase and all that. And you will make money once in a while...but not much. Especially with the competition nowadays, everybody thinks they can be a successful Flipper.....ROTFLMAO...