Getting Started With My First Flip
New to Real Estate · Waterford MI · Member since 2026 · 1 post · 2 votes
Getting Started With My First Flip
10 Replies
- 4dMaurizio PisciottaPro MemberDelray Beach, FL · Member since 2024 · 22 posts · 10 votes
Estimating rehab costs is honestly an art, and even after doing a few projects it can still be hard to get really close unless it’s mostly cosmetic work. If this is your first flip, I’d probably lean toward something lighter rather than a property with major structural, plumbing, electrical, or foundation work. That’s where budgets can get away from you fast.
For contractors, I’d ask for their license/insurance, get references (verify the references instead of just taking a list of names!).. be careful, plenty of scams..
Financing can be done a bunch of different ways depending on your situation: cash, HELOC, hard money, private money, etc. Same with margins and holding costs, you really need to model the whole deal before making the offer.
There are plenty of calculators out there, including BiggerPockets. I personally use Navikoo because it lets me run the flip numbers and also look at comparable sales, which helps a lot when I'm trying to sanity-check the ARV.
Good luck!
- 4dStacy RaskinBusiness MemberLender · Member since 2022 · 1k+ posts · 494 votes
There are fix and flip and DSCR loan options for the area you are focused on. It's more important to work with experienced mortgage professionals who have access to the right investment property products and specialize in them as they are more likely to be able to bring you loan options that you may not find on your own and that big banks and local credit unions either don't offer or they have less favorable terms to the investor. Unlike real estate agents where local knowledge is very important, DSCR and fix and flip loan programs have programs that are with specialized lenders that are national since they are funding loan volume in the millions. This volume and specialization enables them to have specialized investor loan products as they have investors on the back end buying the loans that meet the loan program guidelines which allows them to replenish the cash for new loans. Happy to connect on the lending side.
Bright Skyline518 Reviews - 4dDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
None of this is as "cut & dried" as you think it is😒
How you estimate renovation costs before making an offer
EXPERIENCE!
Or you need to pay a contractor to walk a property with you.
How you find and vet your contractors
VERY difficult!
Contractors always think they are entitled to more per hour than most are worth.
You also want to learn that you don't send a Class A contractor to do work on a Class C or D property - waste of money!What types of contractors/trades you typically have on your team
General/carpenter (jack of all trades), electrician, mechanical, plumberHow you finance your flips
DSCR construction loan, HELOC on primary, credit cards, cashWhat margins you typically underwrite for
20%+How you estimate holding and selling costs
Recommend you use AI for this basic question:)How you find deals and determine whether a property is worth pushing
DIFFICULT!
There are opportunities on the MLS, but you have to CREATE them via finding motivated sellers.
Otherwise, consistently remind your network to you find you own offmarket opportunities
DM me if you'd like to chat more.
Logical Property Management4.9450 Reviews - 3dAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Natsuki, for a first flip, I’d focus less on trying to find the “perfect” deal and more on building a repeatable underwriting and rehab process before you commit.
For renovation costs, I’d get as specific as possible before making the offer. Break the scope into major categories like roof, HVAC, electrical, plumbing, kitchen, baths, flooring, paint, windows, exterior, and permits. Then add a contingency because the first rehab almost always exposes something you didn’t price perfectly.
For contractors, I’d rather pay a good contractor quickly for verified work than put too much money upfront. Detailed scope of work, milestone-based draws, references, insurance, permits where required, and lien releases matter a lot more than just getting the cheapest bid.
From the tax side, flips are generally active business activity, so if you start doing them consistently and profitably, I’d also evaluate whether an S-Corp makes sense based on profit level, activity volume, payroll requirements, and reasonable compensation.
And if you eventually combine flipping with rental real estate, there can be a strong planning opportunity. Depending on participation, depreciation, entity structure, and whether the rental losses are usable, rental losses may sometimes offset active real estate income. In the right fact pattern, taxable income can potentially be reduced very significantly, even to zero, but it has to be planned correctly.
For a first flip, I’d rather make a little less and survive a mistake than underwrite a thin margin and need everything to go perfectly.
Happy to connect!
INVESTOR FRIENDLY CPA®5241 Reviews - Lender · NC · Member since 2024 · 344 posts · 115 votes3d
Welcome! Getting that first flip off the ground is definitely a learning process. I’d be happy to connect and share what I’ve learned about the process, especially around financing, deal analysis, and managing the numbers.
Building a solid network of contractors, lenders, and other investors early on can make a big difference too. Wishing you the best on your first flip!
- 3dGregory AcsPro MemberLender · MD · Member since 2025 · 133 posts · 51 votes
You're asking the right questions before jumping into your first flip. I think one of the biggest mistakes new investors make is underestimating renovation, holding, and financing costs. Building a reliable team of contractors, an investor-friendly Realtor, and a lender before you buy will make evaluating deals much easier and help you move with confidence when the right opportunity comes along.
I'd also recommend analyzing as many deals as you can, even if you don't plan to make an offer right away. The more properties you underwrite, the better you'll get at spotting a good opportunity. If you'd like to compare financing options for your first flip or talk through how different loan structures affect your numbers, I'd be happy to help.
- Fayetteville Arkansas · Member since 2026 · 38 posts · 12 votes1d
Not from Detroit but try and talk to as many contractors in your area you can. And get some rough SF numbers ideas. If you can connect with local agents/flippers you can get a good idea of the rehab.
Generally kitchens and bathrooms are the higher cost items.
- 1dNicholas FloydBusiness MemberNY · Member since 2026 · 165 posts · 55 votes
A good first flip starts with getting the numbers right before you ever make the offer—ARV, rehab, holding costs, selling costs, and a cushion for surprises. I’d also recommend getting multiple contractor estimates and checking references before choosing a crew.
On the financing side, I help investors explore options like business lines of credit, 0% APR business credit cards, business loans, SBA funding, and revenue-based funding depending on their credit profile, LLC structure, and revenue. Having access to capital before the right deal comes up can make a big difference.
Definitely do your own due diligence and only leverage what you can comfortably afford. If you ever want to compare funding options for your first flip, I’d be happy to connect.
- Real Estate Agent · Detroit, Wayne County · Member since 2026 · 10 posts · 3 votes12h
Natsuki, you’re asking the right questions, especially for a first flip.
One of the biggest things I tell people is that the deal has to work before the rehab ever starts. I want to understand the purchase price, realistic after-repair value, renovation scope, holding costs, selling costs, financing costs, and contingency before anybody gets excited about the cosmetic side of the project.
On renovations, I like to break the work into clearly defined phases rather than just hand over a lump sum. For example, Phase 1 might be cleanout/demo, Phase 2 could be rough/mechanical or major rehab work, Phase 3 finishes, and then a final walkthrough before the last payment is released. Each phase should have a written scope so everyone knows what has to be completed before the next draw.
For contractors, I’d rather vet them hard up front than solve problems later. References, prior work, licensing where applicable, insurance, written scope, payment schedule, change-order process, and communication all matter.
As far as margins, I’d be careful about relying on one blanket formula. The property, neighborhood, financing, rehab complexity, and resale market all affect what the deal needs to look like. I’d rather underwrite conservatively and be pleasantly surprised than force the numbers to make a deal work.
I’m right here in Metro Detroit and I work with buyers, sellers, and investors in the area, including rehab and investment situations. If you’re serious about getting your first flip together, I’d be glad to connect and compare notes on local properties, contractors, and the process.
- Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 300 posts · 112 votes11h
Quote from @Natsuki Abe:
I'm based in Metro Detroit area and working toward my first house flip
I'm looking to connect with local investors who are actively flipping houses and learn more about how you actually operate your projects
A few things I'm especially interested in leaning:
How you estimate renovation costs before making an offer
How you find and vet your contractors
What types of contractors/trades you typically have on your team
How you finance your flips
What margins you typically underwrite for
How you estimate holding and selling costs
How you find deals and determine whether a property is worth pushing
I'm also looking to build relationships with reliable contractors, lenders, and other investors in the Metro Detroit market
If you're actively flipping in the area, I'd love to connect and learn from your experience
@Natsuki Abe , I’ve worked with investors where the rehab numbers looked good, but something about the property itself changed the whole deal before closing.
On a first flip, I would spend just as much time checking the property records as the renovation budget. I’ve seen permits, old additions, title issues, or a property being used differently than the records showed become expensive surprises later. Once you know exactly what you are buying, it becomes much easier to decide how much rehab risk you are comfortable taking on.
I’d be glad to stay connected, @Natsuki Abe. I always enjoy connecting with newer investors who are doing the homework before jumping into the first deal.
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