Flipping Houses is the Secret to Your Real Estate Success


In 2017, more than 207,000 houses were flipped in the United States. This is the highest number in the past decade.

Unlike the flipping frenzy of ten years ago, however, today's flippers are making much more financially sound decisions- and reaping the rewards.

If you've always wanted to flip a house, or you'd simply like to learn more about flipping houses, this article is for you. Keep reading to learn everything you need to know about how house flipping could be the secret to your real estate success.

Ready? Let's get started.

What is House Flipping?

House flipping involves buying homes (often at an auction) and then reselling them for profit less than a year later. This can be incredibly lucrative, however, if you don't educate yourself and do your research, you can also lose a lot of money.

Here are a few of the things you'll need if you're interested in house flipping:

Excellent Credit

Unless you can pay cash for a house and also cover all renovations out of pocket, you'll need a loan. And to qualify for that loan, you'll need great credit.

You can get a free credit report from each of the three credit bureaus every year. Now's the time to take a look at your reports and check that there haven't been any mistakes made.

If your credit score needs work, now's a good time to begin building it. Make sure you pay off any debt, pay any bills on time, and ensure you're using less than 30% of the credit available to you at any time.

The higher you can get your credit score, the lower the interest rates which will be available to you when you get your home loan.


One of the most common ways new investors get into trouble is when they purchase a house without a large downpayment and then use a loan or credit cards to pay for the renovations and improvements. 

If this costs more than expected, or the house is on the market for longer than anticipated, you can end up in big financial trouble.

You'll get the best rates from traditional lenders, most of which require a downpayment of 20-25%. 


As mentioned, this is not something you typically want to do without studying up. You'll need to understand what you're doing and be educated about all potential pitfalls. You'll also need to know the market like the back of your hand so you can make smart choices. 


How to Get Started Flipping Houses

Once you've saved enough cash and you've got a great credit rating, it's time to get started. 

Here are some things to consider:

Is the Property a Good Investment?

Obviously, you're well aware that some homes are better investments than others. But it's different when you're making the decision for yourself. Don't let emotions get in the way and remember that this is an investment

One of the most important things to consider is the location. You need to find a house in a great neighborhood, or one that's up-and-coming. While you can make as many improvements to the house as you like, there's no way to improve a neighborhood. 

Research areas with employment growth, rising real estate sales, and good schools. Don't choose a neighborhood with a lot of homes for sale- this can mean the writing is on the wall for that neighborhood.

Once you begin narrowing down your options, don't forget to research the safety for each neighborhood. There are a number of crime mapping services online, and you may also want to check the National Sex Offender Website as many buyers will do this as well.

What's the Condition of the Property?

If you don't do your due diligence, you could be hit with a nasty surprise. It's important that the foundation of the house is structurally sound and there are no issues like black mold.

if you buy a property at auction, you may not always have a chance to get it inspected. That's why you'll need to learn what you're looking for or bring along someone who has the plumbing, electric, or building knowledge you need.

The goal should be to focus on a home that will only need a few quick updates to get it ready to sell. Look for inexpensive updates like fixing up the yard, adding hardware, and updating carpeting and paint. 

Avoid houses that need rewiring, a roof replacement, mold, or anything else that will take serious cash and time.

What's the Value?

Always aim for the worst house in the best neighborhood instead of the best house in a terrible neighborhood. When you choose the worst house, it will be likely to rise in value due to the other homes on the street.

Never buy a property without seeing it in person. It can also be tempting to over-invest in the renovation. Always remember the goal: Selling it quickly and making a good profit.

Always follow the 70% rule. This means that you should pay less than 70% of the after repair value (ARV) of the house you're purchasing, minus the cost of repairs.

This rule will help you avoid overpaying.

Now it's time to brush off your negotiation skills. The less money you spend on your property, the more profit you make. Learn some solid negotiation strategies and make sure you know what you're talking about.

You also need to understand approximately how much some of the most common projects cost.

These include things like landscaping a yard, building a deck, re-carpeting an entire home, or updating a kitchen. While every project will be different, you can quickly learn to estimate so you'll know whether a home is a good investment.

Wrapping Up

Flipping houses can be very profitable, and also a lot of fun. This is a good challenge and will require a lot of patience. While flipping can sometimes be stressful, following the above tips will ensure you have the best chances of success.

Want to learn more about real estate? Check out some of our other helpful blog posts today.