Can you really get rich quickly from fix and flipping homes?

Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income.

Mark Ferguson has been a Realtor since 2001 after graduating from the University of Colorado with a business finance degree. He runs a real estate team of 10 that sells over 200 homes a year, fix and flips 10 to 15 homes a year and owns 11 rental properties. Mark also runs, a blog that discusses Mark’s fix and flips, rental properties, becoming a real estate agent and everything real estate related.

Many television shows portray fix and flipping as a very profitable business that can easily be done in your spare time. Sure there are usually a few contractor problems, but in the end the house sells for a lot of money and the owners make a killing. In reality, you can make money fix and flipping homes, but it takes a lot of hard work and a lot of flipping to make a lot of money. It is also very easy to lose a lot of money if you do not account for all the costs or overestimate the value of your flip.

I have been a Realtor since 2001, and I have fix and flipped close to 100 homes over the last 10 years. I have 10 fix and flips going right now, and I can tell you it is not easy managing one fix and flip let alone 10! It takes a lot of money to fund fix and flips, more time than you think to sell a flip, a lot of experience to deal with repairs and contractors, and expenses are almost always more than you figure.

If you buy houses cheap enough with enough of a margin for error, you can make good money fix and flipping homes — but don’t expect to be a millionaire after a year or two in the business.

Are the Television Shows Accurate in Their Portrayal of the Flipping Business?

Most fix and flip television shows love to show the before and after pictures of a flip with the initial purchase price and the selling price at the end. There are a couple of shows that portray the expenses accurately, but most leave out many of the costs that flippers encounter. In the fix and flip business, many investors use the 70 percent rule to determine if they can make a good profit when they flip a home.

The 70 percent rule states the purchase price should be 70 percent of the after-repaired-value (ARV) minus the cost of any repairs. For example, if a house will be worth $150,000 after it is repaired and it needs $30,000 in repairs, the 70 percent rule states an investor should pay $75,000 for that house. Buying a house that will be worth $150,000 for $75,000 seems like a home run, but it is really just an average deal because there are so many costs associated with flipping.

What Costs are Involved in Fix and Flipping Homes?

The obvious costs involved in flipping are the purchase price of a home and the repair costs. In our example, there appears to be $45,000 in profit once you include the selling price and the repairs but there are many more expenses that many beginners do not consider.

  • Financing costs: Most people do not have $75,000 plus the costs of repairs and carrying costs to buy a flip. It is more expensive to finance a flip because banks make their money off interest paid on loans. The shorter time you hold a loan, the less money a bank will make. Most large banks will not finance flips, but some local lenders will. Hard-money lenders will fund flips, but they are very expensive, charging 12 to 16 percent interest rates plus 2 to 4 percent of the loan amount for origination fees. A hard-money lender is a not a bank but a company that takes money from investors at a given interest rate. The hard-money lender then lends that money to fix and flippers at a much higher interest rate.
  • Carrying costs: When you own a house, you have to pay for the lawn care, heating, insurance, taxes, HOA and more while you own the home.
  • Purchasing costs: Besides the loan origination costs, there are some other costs to consider when buying a flip. A home inspection will run $300 to $800. Some lenders will require an appraisal, which is $400 to $600. There will be a closing fee, recording fees, tax certificates and much more.
  • Selling costs: When you sell your house, you will most likely have to pay a real estate agent to sell the flip and possibly cover closing costs for a buyer. The real estate commission and closing costs can add up to be 10 percent of the sale price.
  • Miscellaneous costs: Depending on where and how you buy your property, it may have a tenant or the previous owner may still be living in it. You could have eviction costs or costs to pay the occupants to leave.

Here is an example of what the total costs would look like on a typical fix and flip I buy and sell. I have a great lender who charges me 5.25 percent interest rate and 1.5 percent origination, but they only lend on 75 percent of the purchase price. My loan costs are much lower than most flippers’.

Purchase price: $75,000

Loan amount: $56,250


Loan costs: $2,500

Carrying costs: $1,600

  1. a. Insurance: $400
  2. b. Lawn maintenance: $300
  3. c. Taxes : $400
  4. d. Utilities: $500

Buying costs: $1,000 (I usually do not do an inspection or have an appraisal)

Repairs: $30,000

Selling costs: $7,000 (Since I am a Realtor, I only pay the buyer’s agent commission. I list the house myself and do not have to pay a listing agent.)

Miscellaneous: $5,000

Total costs: $47,100

If I sold the house for $150,000, my profit would be $27,900. That is a decent profit, but I want to make at least $25,000 on each flip because of the risk involved and the money I put into them. On this flip, I would need at least $50,000 of my own cash for the down payment, carrying costs and repairs. Beginning flippers could easily spend three times as much for financing costs and another $4,500 to pay a listing agent. That cuts the profit to under $20,000 for a house that sells for twice as much as it was purchased for. The next time you watch a fix and flip show, see how many of these costs they actually tell you about!

Will You Make More Money Fix and Flipping More Expensive Homes?

It is true that the profit potential goes up when you flip more expensive homes. However, there are many more risks involved when flipping expensive houses.

  • The repairs will be much more expensive because buyers will demand higher quality.
  • It takes longer to sell more expensive houses and your carrying costs will be higher.
  • The carrying costs will be higher due to HOAs, more maintenance needed, higher taxes, etc.
  • You will need more cash because down payments, carrying costs and repairs will be higher.
  • All your money is in one house instead of multiple homes, increasing the risk if something goes wrong.

The biggest problem with flipping more expensive homes is that the difference between the buy price and sell price is massive. Using the 70 percent rule, a house with a $500,000 ARV would have to be bought for $300,000, if it needed $50,000 in work ($500,000*.7-$50,000=$300,000). It is very hard to find a deal that has such a large difference between the ARV and the purchase price because an owner-occupant buyer would be willing to pay much more for the house. The owner-occupant can pay $400,000, put $50,000 into the house and still have a great deal. In the more expensive market, it is much more likely owner-occupants will have the cash to put into homes.

How Long Does it Take to Fix and Flip a House?

From start to finish, my goal is to have a flip for four months from the time I buy it to the time I sell it. I almost never hit that number because there are so many unknowns. The biggest delay I have is finding good contractors, especially when I have 10 properties at once. It takes me a couple of weeks to get a contractor started on the work, about a month for the work to be done, about three weeks for the home to be on the market before a contract is accepted and yet another month for the escrow/closing process — if everything goes perfectly.

Unfortunately, it often takes longer for the contractor to make repairs. We inevitably see a few things the contractor missed and they have to go back to the home to take care of those items. Then we have to line up cleaners and get the home listed. Sometimes it takes three weeks to get a good offer; sometimes it’s just one week, but it could just as easily be two months. In addition, the escrow process can vary from one month to sometimes two months. Now that I have so many houses and not enough contractors, I am looking at almost nine-month turn times on some of my properties.

Is All the Hassle Worth it When Fix and Flipping Homes?

After looking at all the costs and everything that has to be accounted for, it may seem a bit intimidating to flip a home. Especially when you consider we have not even talked about how to find a fix and flip that can be bought cheap enough to make money. Just like anything in life, it takes time to learn what you are doing and feel comfortable. I still am learning new techniques to find properties and finding better ways to fix and flip homes.

After you learn the business, it can be a lot of fun. I still get excited whenever I get a new deal under contract, almost as excited as when I sell one for a nice profit. Over the last two years, I have averaged about a $35,000 profit on each of my fix and flips. I completed 10 flips last year and should complete (buy, fix, sell) over 10 this year. On most flips, I make around $30,000 in profit; but once in a while, I will make more, like this property that I made over $50,000. In the last 13 years of fix and flipping homes, I have made over $100,000 twice on a single flip. My success has not come from making a huge profit on one or two flips a year, but on consistently making modest profits on multiple homes. There is much less risk flipping many lower priced homes than flipping one expensive home.

The best part about this business is that I do not flip full time. I run a real estate team of 10 and my primary job is running that team and selling houses. Once you set yourself up correctly with the right contractors, the right financing, enough of your own money and experience, the business does most of the work itself. It is not easy to get to that point and it takes a lot of time and reinvesting money back into the business.

How Do You Find a Great Deal to Fix and Flip?

Finding a great deal is the key to making money in the fix and flip business. I used to buy 90 percent of my fix and flips at the public trustee foreclosure sale. These houses were sold in as-is condition for cash, and many times the inside of the house could not be viewed or homes were occupied. When I bought a home at the trustee sale, I had no inspection period and no way to back out once the property was purchased. In the last two years, the competition at the trustee sale has increased and I have not purchased any homes from that sale in over a year. In fact, I do not even go to the sale anymore because people are paying close to the amount you could buy a house for on the MLS. When I buy on the MLS, I get to have an inspection done, I can use a loan to buy the property, and I don’t have to deal with any occupants.

Almost all of my deals are bought on the MLS now. There are a few tricks to getting a great deal, but it is not easy with rising prices and competition.

  • Act fast: I make offers within hours of homes being listed.
  • Become an agent: One of the reasons I can act so fast is that I write the offer, set up a showing and I do not have to wait on an agent.
  • Look for properties that need work: The more problems a property has, the more potential profit there is. Make sure you know how to fix the problems and how much it will cost!
  • Look for properties that have been on the market over 90 days. The sellers are more likely to accept low offers on these homes. If they are grossly overpriced, I do not even bother.
  • Make offers on homes that come back on the market quickly. I can set up MLS alerts to tell me when a house in a certain price point comes on the market or comes back on the market after a contract falls apart. Many times the great deals that need work have contracts that fall apart because buyers don’t realize how much work is needed until their inspection.

There are other ways to get great deals such as direct marketing to sellers who do not have their properties for sale or finding wholesalers who sell cheap properties to investors.

What Should You Avoid if You Decide to Start Flipping Homes?

If you have decided you want to give flipping a try, here are some tips to keep you from losing too much money on your first try.

  • Only do the repairs yourself if you know what you are doing and have time to complete them. Many flippers try to save money by doing the work themselves. They don’t realize how long it takes to make repairs, especially in their spare time. It ends up taking months to fix the property and the extra time will eats up the money you thought you saved by doing the work yourself. To make the situation even worse, the work won’t be as good as if a professional did it.
  • Do not overestimate the value of a home or rely on values to increase to make money. Many markets have increasing prices, but that doesn’t mean they will keep increasing. A lot of flippers went bankrupt during the housing crisis because they assumed the market would keep going up. When prices stopped increasing and then decreased, they lost everything. I kept flipping right on through the housing crisis because I based values on the current market and left myself room for adjustment.
  • Do not overprice a home when you list it. To make money flipping, you have to sell quickly and keep your money moving from property to property. If you have a house sitting on the market that won’t sell, it is most likely overpriced. I have found that the sweet spot for a house to be on the market is three weeks and then I usually get an offer. If I don’t get an acceptable offer after 30 days, I lower the price 5 to 10 percent, depending on the activity.
  • Don’t try to sell a house yourself unless you are an agent. If you sell a house for sale by owner, you lose market exposure by not being in MLS. Ninety percent of buyers use a real estate agent to represent them and those agents look on MLS to find properties for their buyers. If you use a limited service company that puts the home on MLS, you still have to pay for the buyer’s agent. You are saving very little money and the buyer has representation while you do not. Who will get the better deal?
  • Always assume your repairs will be more expensive than you think and the flip will take longer than you think. Even if you get a bid for all the work before hand, things always pop up that you didn’t see or you couldn’t have known about.

My Worst Flipping Experience

There is a lot of information in this article and I didn’t even come close to covering every topic involving flipping houses. I hope it gives you an overview of what it is like and what it takes to flip houses. It is not about hitting a homerun on every flip, but hitting a lot of singles over and over again. I have lost money on flips before, sometimes because of things I have no control over. Since I had many flips going at once, losing money on one flip did not destroy my business — but this was the worst experience.

A couple of years ago, I bought a flip at the trustee sale. I saw the interior of the home through the windows but never got inside the house before I bought it. It was a good deal on a newer house, with little work needed and I thought I would make some easy money. After I bought the house and got the locks changed, we found a brand new BMW in the garage. I knew something very odd was going on, so we tracked down the previous owners in California (I am in Northern Colorado). They claimed the bank had foreclosed wrongly and they were going to get the house for free. They ended up filing a lawsuit against the bank a week later and we had a house we could not sell because it was involved in litigation.

The previous owners had been convinced they would get the house for free by a legal aid. We offered them $5,000 to drop the case and they would not even think of it, because they knew they would get the house for free. Long story short, the lawsuit was frivolous and thrown out by a judge as soon as he saw the case. The problem was that it took the court almost a year to look at the case even after we had hired lawyers and paid them almost $10,000 to speed up the process. After carrying costs and lawyers fees, I lost about $15,000 on that house. There was no way to know that would happen, but sometimes that’s how it works when buying houses at the foreclosure sale. That is why I prefer to have multiple low-value houses at the same time, instead of one expensive house. I was still making money and turning other properties while that house was tied up. If all my money was tied up in one house that I could not sell for a year, I could have been in serious trouble.


I have been in the fix and flipping business for a long time and it has been very good to me. It is not easy to get started, to find great deals, find great contractors or to get all the money needed to flip. It is not impossible either, but it does take a lot of planning and education to get started. If you want to ask any questions in the comments, I’ll try to respond as quickly as possible.

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There are 48 comments to "Can you really get rich quickly from fix and flipping homes?".

  1. lmoot says 05 October 2014 at 04:42

    Wow, this is the best article on flipping I’ve read. Very informative and impartial. Though my main goal is to own rental properties, I would like to focus on fixer-uppers as I am tighter on cash, but have access to a higher line of credit that has multiple 0% for 2 years offers (basically a free loan as long as you meet the requirements…pay the minimum on time and pay off the balance before the offer expiration).

    Perhaps as I get more experience renovating houses for rent, and create a network of local business to work with, I may pursue flipping. I’m curious though how or if Zillow has any effect on flipping since often times the value they list doesn’t reflect recent updates to the house and that’s what I know a lot of buyers look at when deciding how much they offer or are willing to pay for a house…even if it is not accurate.

    • Mark Ferguson says 06 October 2014 at 10:22

      I missed your question on Zillow earlier. I think Zillow can be way off, but hopefully agents will inform their sellers of this. I buy most my properties off MLS and although I do some direct marketing I almost always give sellers the true market value. I can’t bring myself to by a house for $50,000 when the seller thinks it is only worth $70,000 but it is actually worth $120,000. Zillow may hurt some buyers though and I am sure there are many investors who are happy to do it.

  2. NicoleAndmaggie says 05 October 2014 at 04:46

    Fantastic article! Even though I have zero interest in flipping houses myself I totally want to read your blog now. I like reading afford anything too for property flipping. Way better than TV.

  3. Reece says 05 October 2014 at 05:15

    Wow, thanks for all the information! Personally I’m not interested in flipping, but I have bought, renovated and rented and fully agree that it always costs more than you think.
    Thanks again for a really interesting article.

  4. Mark Ferguson says 05 October 2014 at 06:58

    Imoot, thank you very much! I think long term rentals are the key to building wealth and freedom and flipping is more of a job. Flipping definitely helps me buy more rentals. My blog actually started as a focus on my rentals and my plan to buy 100 of them. I am up to 11 and still chugging.

  5. CheapMom@SimpleCheapMom says 05 October 2014 at 06:58

    Thank you for putting this information out there! I used to watch all those flipping shows and wanted to get into the business. It seems like you’re making good money from this side business but it also seems like it took a lot to get it going.

  6. Mark Ferguson says 05 October 2014 at 07:02

    Cheap mom, thank you! It takes a lot of time to educate yourself and find the right financing or save up money. However, most things in life that are usually the most rewarding take time and education as well. It is not something you can jump into on the weekends and expect to make an extra $100,000 right away. If you tart small and reinvest into the business it can be a lot of fun and a great business.

  7. KC says 05 October 2014 at 08:12

    One of GRS’s best articles–well written, lots of new and not readily available information, lots of myths debunked, and real insights into what it takes to flip successfully. Like some other commenters, I don’t have any plans to go into flipping, but this posting is interesting on its own merits. Nice work!

  8. SavvyJames says 05 October 2014 at 09:05

    Some great, great information and guidance. Like a lot of people, the wife and I have given it some consideration. Not sure if we will ever pull the trigger and go for it, but you have definitely provided food for thought.

  9. Mike says 05 October 2014 at 09:27

    What happened to the BMW? Did it get repossed or was it yours with the purchase of the house?

    • Mal says 05 October 2014 at 10:01

      Ha, yeah, I was wondering about the BMW situation too. Great article. I have no interest in the business and I was still fascinated.

  10. Mark Ferguson says 05 October 2014 at 09:59

    Thank you KC!

    Mike, the previous owners came and got the car. With eviction laws you have to give the previous owners a chance to come get valuables. Usually if the garage sale value is over $300 you have to do a personal property eviction. Another myth from fix and flip shows is that you can legally keep everything you find in a property.

  11. Golfing Girl says 05 October 2014 at 18:04

    Great article and well written. I love the HGTV show Flip or Flop. I wouldn’t ever do it but love the idea and enjoy seeing the possibilities of a dump. 🙂

  12. Jennifer says 05 October 2014 at 18:13

    Outstanding, detailed post! Would love to see more posts like this on GRS.

  13. lanthiriel says 05 October 2014 at 18:14

    Thank you for this very informative article!

  14. Samphy says 05 October 2014 at 21:55

    Though I don’t know much about this topic but I know that this is a great article. How it is structured and written makes it so easy to comprehend. Thanks for the great post!

  15. Chris says 06 October 2014 at 00:43

    I can see the financial potential in this venture. This is a great article and very informative. Thank you.

  16. bruce says 06 October 2014 at 04:21

    Nice job Mark. I also am a Realtor, and have flipped 11 homes. I recommend estimating all expenses of the proposed flip and bumping that number up by 20% for “unseens”.
    I agree rentals are the way to go. For an average person, 3-4 paid off will provide enough additional retirement income for a comfortable lifestyle.

    • Mark Ferguson says 06 October 2014 at 10:19

      Hi Bruce,
      I agree with bumping that number up by 20%. I usually add $5,000 to everything and my repairs are usually $15,000 to $20,000 which is right in line. I don’t like to be average. 🙂

  17. [email protected] says 06 October 2014 at 12:01

    Great info here… but it does seem like flipping is an option best left for people already somehow involved in real estate (contractors, realtors, etc). It just seems like too much risk for the regular Joe to take on, unless they already know the industry… a lot of the challenge in flipping is properly assessing value, and unless you know what you’re doing, it seems like it’s pretty easy to get burned there.

  18. Flapjack says 07 October 2014 at 08:52

    Great info Mark! I’ve never really considered flipping houses, but maybe someday… very informative and interesting to read!

  19. CCH says 07 October 2014 at 12:29

    Mark – I am curious as to why you do not account for the capital gains tax on the sale of your flipped houses. If you are flipping them in less than a year, are you paying ST capital gains tax on each sale, or is your goal to 1031 exchange each property and continually defer the taxes?

    • Mark Ferguson says 07 October 2014 at 12:43

      Hi CCH, I do not do 1031 exchanges. There are a couple issued with IRS tax code (I am not an accountant) From what I understand professional flippers cannot use a 1031 exchange on their flips or are at least much more scrutinized. You don’t have to hold a flip for a year, but actually have it rented for a year and then there is no specific code that mentions 1 year, that is just what people have assumed.

      Yes I pay capital gains tax on my flips, but it is income just like my real estate job and I pay taxes on that as well.

  20. Dan says 08 October 2014 at 05:24

    This may have just been for example purposes, but why would you take out a loan? 5% of your bottom line goes right down the drain because of your loan costs? 7k seems like an excessive amount of money to sell a 150k house as well.

    • Mark Ferguson says 08 October 2014 at 08:45

      Hi Dan, I take out loans because I can buy more properties. I do not have an unlimited amount of cash, in fact at ten flips I was mostly tapped out. I can buy 10 flips with loans or maybe 4 with all cash.

      I may save $20,000 by using all cash on those four properties, but I am missing out on $180,000 in profit on the six properties I can’t buy.

      As far as selling costs, I assumed a 3% commission to the buyers agent, $1,000 for title insurance, $500 for recording fees and closing fees, plus most buyers are asking for closing costs to be paid by the seller which are another 3%.

  21. superbien says 08 October 2014 at 07:39

    Great article, thanks!

    I was especially struck by your comment (not in the article) “I think long term rentals are the key to building wealth and freedom and flipping is more of a job. Flipping definitely helps me buy more rentals.”

    That’s something I’m thinking about, pretty seriously. I’m looking at good school and commute areas, and have found that to buy a house by itself is not that much cheaper than to buy a multi-family (ie rental). If we buy a 2-family and rent out the 2nd apt, we will save on mortgage and be able to do upgrades in our unit, then switch units and upgrade the other one.

    Any chance you’d follow up with an article about buying and running rentals? You seem very knowledgeable, and like you have your head on straight.

    • Mark Ferguson says 08 October 2014 at 08:48

      Thank you! I would love to write another rental article for GRS. I will ask and see what they say. I also have a ton more info on rentals on my blog

      Buying multifamily can be a great investment. In my area multis are super expensive, but I know in other areas they can be a great deal.

  22. Jeff says 09 October 2014 at 16:01

    Flipping is no different than gambling in the stock market. You are speculating that property values will hold steady, or rise, during rehab and holding. They most likely will, but look what happened to flippers in 2008.

    With flipping nearly ALL of your money could be tied up in that deal. One bad deal and you’re back to zero, again…

    Flipping is also a full-time job and you’re paying capital gains tax as well! Not financially intelligent.

    Real wealth, and real financial freedom is accomplished only through the buy, improve, hold, and rent business model.

  23. Mark Ferguson says 09 October 2014 at 16:47

    Jeff, I would completely disagree with you. The stock market is completely different than flipping for a couple of reasons. 1. You can buy real estate below market. You can’t buy a stock below market value because the prices are all published and known for something that has 1,000s of quantities. Every house is different and every value is different. Houses can be under valued, bought cheap because of condition or bought cheap due to sales terms cash, no inspection. Etc. a stock is always bought at market value. Some people may think it is undervalued, but its still market value.
    2. Houses can be repaired by me to add value, a stock is run by someone else. Most companies can’t be repaired in one month to add 20% to the value.

    I have been flipping since 2001. Right on through the crash. So have many other flippers. The flippers who went bankrupt were mostly speculators assuming the markets would keep rising. I have enough profit to withstand a 10% correction, which will hardly ever happen in a 6 month period at least it hasn’t ever happened on my market before.

    I have 9 flips right now, how is that having all my money tied up in one deal?

    • Jeff says 09 October 2014 at 16:59

      Hey Mark,

      Glad to hear you’re doing well, and I wish you tons of success, but the truth is you’re a rare breed. Too many people have been wiped out by attempting to flip.

      I only wish the best for all of you readers out there. Flipping is much more risky than the buy, hold, and rent business model. It’s also financially unintelligent.

      How much passive income do flippers earn?

  24. Mark Ferguson says 09 October 2014 at 17:10

    People are wiped out all the time investing in things they don’t fully understand or research. I know many flippers just in my town that have been successful for decades. It’s a business and should be treated as such. I also run a real estate team of 10 and have long term rentals as well as run my blog. I spend maybe 10-15 hours a week on flipping.

    Your right flipping does not create passive income, but neither does a job. Do you think jobs are financially unintelligent? You must have money to buy long term rentals and get the best returns. Flips allow me to buy many more rentals because of the income I earn from them. I have 11 rentals and there is no way I could afford them all without flipping.

  25. Charles says 21 October 2014 at 12:18

    Hello Mark,

    I just purchased my first investment property to flip and or rent depending on the market. However, I currently live in the house while I am performing the renovations. This worked out nicely as the mortgage w/ taxes is about 65%% less than my previous monthly rent. If I was interested in flipping the home rather than renting it out, how would you suggest transitioning into another flip? My significant other has had enough with living in a construction zone and has made it clear she will not live in another project house. However, the idea of going back to paying rent doesn’t really seem logical either, or is it? Should I leverage the potential equity and purchase another project home, or sell it outright and re-invest the profits into the next project while renting a place to live for myself and my family? That is of course of I decide to go with a sell option rather than becoming a landlord. Thank you in advance for your time.

    ~ C

    • Mark Ferguson says 21 October 2014 at 13:42

      Hi Charles, I don’t think going back to renting is a bad idea if it allows you to keep flipping. If your significant other doesn’t want to live in a construction zone it is probably wise not to live in another flip. If you rent while you flip you probably can qualify for more than if you bought a house to live in.

  26. Dilfateh says 01 June 2015 at 12:16

    I think flipping is gonna be cery easy for me since my dad owns a contracting conpany and my older brother is a realtor.

  27. Sandy says 27 February 2016 at 11:48

    VERY informative! The CLEAREST I have seen. It was nice to hear it in layman’s terms. I too, have always THOUGHT about flipping homes, but don’t have anything CLOSE to the money needed to BUY anything, let alone FLIP it, lol!! Thank you so much for the information!

  28. mocha2 says 14 March 2016 at 16:53

    Hi Mark – excellent articles on your site! After buying a house for my family under market value, renovating it with a good contractor and building at least $50K in equity in the process, I’m looking into buying rental properties and possibly also flipping houses in the Philadelphia market, which is growing and still has good properties under market value. I was interested to see you say “rentals are the key to building wealth and freedom and flipping is more of a job”. That makes sense, and I think starting with a rental may be the way to go, and then perhaps try one flip to see if it works well for my situation. Two questions for you: 1) I just bought a house, and my credit score is only 680 (due to a short sale during the financial crisis), and even with $150K income, it was not easy getting a mortgage. I’m nervous to do a HELOC – would you recommend a HELOC or going through the mortage process in my case?; 2) how do you deal with renters in your rental properties? I’ve always heard that’s a nightmare. Thanks very much!

  29. Jonathan says 14 March 2016 at 17:16

    What do you recommend to someone who doesn’t have one handy bone in his body or a real estate license, but around $200,000 in cash who wants to start flipping? What types of problems are good problems for the house to have when searching for your first fix and flip? Is there a simple list of rules for a first time flipper who doesn’t require financing?

  30. Pete says 28 March 2016 at 17:23

    Your article is misleading because you do not mention about taxes at all. By categorizing yourself as a professional flipper, you are paying a tax percentage around 40%, which make the deals no way near $25,000.

  31. Mark Ferguson says 29 March 2016 at 18:43

    Mocha2, Helocs are awesome for short term fianncing like flipping. heloc verse mortgage would depend on what you use money for. renters are not nightmares if you take your yime choosing them and keep tabs on them.

  32. Mark Ferguson says 29 March 2016 at 18:45

    Jonathon, yiu don’t need to be handy. I don’t do any work on flips myself. The key is finding contractors and managing them well. the less work needed on your first flip the better

  33. Mark Ferguson says 29 March 2016 at 18:46

    Pete, doesn’t every job have to pay income taxes? If someone makes a $400,000 salary they dont say they make $220,000 a year. You assume they pay taxes

  34. Aundrea says 08 July 2016 at 08:26

    As an aspiring flipper, the most nerve-wrecking aspect for me is the gap in time between purchasing the first flip and being able to rely on flipping income. How long was this time for you?

    Thank you!

    • MarkFerguson says 27 July 2016 at 08:39

      I would count on it being 6 months. It is tough to jump in full time right away, unless you have a lot of money saved up./

  35. paul says 26 July 2016 at 20:45

    ive been trying to get started on flipping full time for about a yr now . what tips would you give to someone new trying to get started like where to finding the funding etc . i just recently got my real estate license also so im already an agent with access to the mls in nj

    • MarkFerguson says 27 July 2016 at 08:38

      Have you seen my blog I have a ton of info on flipping there.

  36. Douglas says 24 August 2016 at 18:11

    Hello Guys,

    I’m about to start flipping houses and would like some advise.
    Should i start just by hiring a agent and using my personal account or should i open an LLC?

    Thank you so much for the help!

  37. annette allen says 23 January 2017 at 21:10

    Thank you for sharing your knowledge; it was very helpful.

  38. Ramom says 22 November 2017 at 08:55

    Hi Mark thank you for all info it’s very helpfull. I’m trying to start looking into flipping houses do you recommend any books out there for a rookie like me?. Thanks again.

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