How To Start Flipping Houses

In recent years, flipping houses has turned into a lucrative, exciting business. You probably guessed by the sheer number of house-flipping reality TV shows.
Yet, even though they make it all sound so easy, flipping houses can be arduous and time-consuming. So, if you’re not afraid of getting your hands dirty, it’s time to introduce you to the art of flipping houses.
As with any type of business, you’re going to need a plan of action. Lucky for you, we’ve got you covered. This post serves as your plan of action where you’ll learn all you need to know about how to become a successful house flipper.

How to Start Flipping Houses

Check out our 5-step guide and learn how to flip houses.

Draw Up a Business Plan

Any business, new or old, has to have a guide on which to navigate. That’s what a business plan does; it helps you track investors, estimate profits, and much more.
There are two ways to do this. You can either write it up yourself or use a business plan template. Whichever option you choose, it’s always better to seek the help of an accountant or attorney so you don’t miss any key points.
Remember, a great percentage of startups fail mainly because of a lack of research. Despite being tedious to formulate, a business plan can mean the difference between becoming a success and falling flat on your face.
Here are several of the main components you should include in your business plan:
  • A summary of the scope of your business and your vision for it in upcoming years
  • Sum of money you’re starting with
  • The total amount you plan on spending to buy and renovate properties
  • The amount of time your business will take before you start making money
  • Names of people involved in your business
  • The level of demand for the business and its competitors

Register Your Business

Before you can legally operate as an official house flipper, you’ll need to register your business. To do that, you have to have the necessary forms and paperwork.
Talk with your attorney to make sure you’re right on track. You can also check in with your regional chamber of commerce if you have any questions.
Here are a few of the basic forms you’ll need:
  • Register for an employer identification number (EIN) with the IRS
  • Business and commercial property insurance
  • Workers’ compensation if you’re hiring employees
  • Disability and unemployment insurance
  • Business licenses and permits, which vary from state to state

Set Up a Solid Financial Plan

Finding money to finance your house-flipping business takes time. If this is your first flip, then the banks won’t be able to help you out, as they typically approve loans for well-established businesses with good credit.
Also, repayment on most bank loans can last for several years. That’s too long for a house-flipping project that can be completed in about a year or less.
As a brand-new business, you have other loan options available to you, such as:
  • Tap into your personal investments or funds
  • Friends/family loans as lenders or potential investors
  • Crowdfunding
  • Credit unions
  • Bridge loans, or short-term mortgages via house-flipping lenders

Grow Your Network

A big part of the success of any enterprise is who you know. People are your assets when it comes to house-flipping.
This includes craftspeople, real estate agents, and contractors. Even family and friends who spread the word about your business are a vital part of your network.
Another idea is to find experts in the industry and ask them for advice and suggestions. You can seek out a local real estate investment group and become a member. It’ll give you insight into the industry from a seller’s and buyer’s viewpoint.
Do you have a local branch of a Real Estate Investment (REI) club nearby you can join? That could be another way to connect with all sorts of professionals within the industry.
Your network also refers to the professionals you surround yourself with on every project. Having a solid team will make things go more efficiently and with as few hiccups as possible.
We’ve put together a list of professionals you should include on your next flip:
  • Realtor
  • Construction contractor
  • Attorney/title agent
  • Accountant/CPA
  • Lender

Identify Your Target Market and Start Flipping

Experienced house flippers will tell you a large part of their success hinges on the degree of supply and demand. This is why it’s vital to tap into the current property market. Only then will you be able to decide where to find your next venture.
If you need help finding a house to flip, you can enlist the help of either a traditional or wholesale broker. Auctions are another terrific source of properties and buildings to choose from.
So, how do you know which one is right for you? It depends on what kind of property you’re interested in.
A traditional broker is ideal if you’re just starting out in the real estate market. Plus, they can help you find a specific kind of building or property you have in mind.
If you’re looking for foreclosed or highly distressed properties, then you should go with a wholesaler. They’ll always have plenty of options for you to choose from.
Whatever you decide to go with, make sure you stay on top of current real estate trends. Knowing what’s popular will give you insight into the housing market and what steps you, as a real estate investor, should take next.


Like any business, learning how to start flipping houses requires preparation and planning. Being thorough and diligent can help you avoid common mistakes and pitfalls.
It’s just as important that you’re always aware of the risks involved, especially with a time-based venture like house-flipping.
Use our how-to guide to help you kick-start your real estate business. Start by understanding the market and surrounding yourself with savvy professionals.
Before you know it, you’ll be earning hefty profits, meeting interesting people, and having a lot of fun in the process!