House Flipping Explained

FIRE Realty Team is covering the various methods of real estate investing, including wholesale real estate, buy and hold real estate, and flipping houses. Let’s dive in.

What is house flipping?

Flipping is relatively straightforward. You buy a house that needs repairs, make the repairs, and sell the house for a profit.

Opening Thoughts

It’s definitely a very tried and proven method of making money. Similar to wholesaling, it’s hard to call it “investing” as it’s more so “making money” through real estate. This isn’t a method to build wealth but rather a means of making money.

Pros

  • Fast (6-18 months usually) way of making a chunk of money
  • Plenty of resources and education are available from people who have done it successfully

Cons

  • Highly competitive in today’s market
  • Slim margins
  • High Skill, capital, and resources required
  • It’s a job, not an investment (since you’re selling the asset for a profit)

Summary of Real Estate Flipping

Flipping can be a decent way to make extra money if you push through the obstacles. It’s not easy. Finding a deal and being confident in the rehab and ARV (after repair value) numbers is challenging.

You can do the work yourself, thus having the biggest margin, but at the cost of your time and labor.

You can hire individual contractors and manage them. It is more difficult to manage others and a medium margin.
You can hire a general contractor for the project. However, it will be tough to make the numbers work as a GC will be the most expensive, so you would want to be really confident in the numbers.

-Insight from Joe Hammel

FIRE Realty Team Disclosure

All content and information on this website is for informational and educational purposes only. We provide general information based on experience from a successful personal portfolio of cash flow properties. The information presented here is not a guarantee. The information contained on firerealtyteam.com is for general purposes only.

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