How Big of a Remodel Can New House Flippers Handle?

House flipping can be a really fun job, but it can also be a very stressful job. I have 11 flips going right now, and you would think I have it all figured out, but I still learn new things about flipping. As I became more and more experienced with flipping, I started to take on bigger and bigger remodels. Many times the more work a house needs, the better deal you can get on it, and the more money you can make. While you can make more money on large remodel jobs, you take on much more risk. I have taken on three flips in the last two years that needed over $60,000 in repairs. I did very well on two of those flips, but might lose money on the third. If you are a new flipper, I would be very careful about taking on huge remodel jobs. There are so many things that can go wrong on a flip, and the bigger the job, the more things that will go wrong.

What do I define as a big remodel job on flips?

When I flipped houses ten years ago, it seemed like we could get every remodel done for under $20,000. Today, it seems impossible to get any job done for less than $20,000. Prices have increased for materials and labor, which have pushed up the cost of remodels. There is also high demand in my area for contractors right now, because new building has increased.

When I pay $20,000 for a remodel on a flip I will usually fix the following items on a 2,000 square foot house:

  • New interior paint
  • New flooring throughout
  • New fixtures (lights, faucets, door handles, towel bars)
  • New doors
  • Minor drywall repairs
  • New outlets or outlet covers and minor electrical
  • Minor plumbing work
  • New vanities, new appliances, new counters

I would call the above repairs “cosmetic items”.

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Many flips will need more work done like:

  • New kitchen cabinets
  • New bath fixtures (tub, shower, toilet)
  • New windows
  • Siding work
  • Roof
  • Landscaping

The repair items above would be more of a “moderate remodel”.

Some flips need even more work like:

  • Foundations
  • Major carpentry (new bedrooms, basement finish, remove walls)
  • Major drywall repairs or replacement
  • New electric
  • New plumbing
  • New sewer line
  • Additions

The above repairs would be part of a “major remodel”.

With the moderate remodel we probably spend close to $30,000 or $35,000 on the rehab. With the major remodel we get into the $50,000 and higher range. There are some houses that need all of these repairs and some that need a mixture of cosmetic, moderate and major repairs.

Here is an article with more information on how much it costs to remodel a home.

Why would someone take on major remodel jobs on flips?

It would be awesome if every flip I did, only needed a cosmetic remodel. However, if I only bought houses that needed some cosmetic repairs, I would not be able to flip many houses. One of the reasons I can get a great deal on properties, is I am willing to take on bigger projects. I have found there can definitely be projects that are too big and not worth the risk. I try to find a happy medium, where I am buying houses that need moderate work with a few major problems, but not houses that have every major problem.

Here is a great article on how to find a contractor.

What can go wrong with a major remodel?

There are many costs associated with flipping, besides the repairs.

  • Maintenance: snow removal, grass cutting, etc.
  • Utilites: you have to pay for gas, electric, water.
  • HOA: if the property is in an HOA you have to pay these dues.
  • Finance: most people cannot pay cash for a flip and will have interest charges.
  • Insurance: most flippers insure their homes while they own them.
  • Taxes: there will be property taxes while you own the property.

Here is an article that goes over the costs involved when flipping.

When you take on a major remodel, it takes much more time to complete the repairs. All the costs that come with holding a flip, add up very quickly. Not only will a major remodel take more money for the repairs, it will take much more money due to the holding time.

It also usually takes more time than you think to flip a house. The bigger the remodel job is, the more that can go wrong. A big remodel job can cause huge delays in the flipping process. When things go wrong, it costs more money and huge remodel jobs often cost much more than first planned.

You can take on major remodels, but you have to be sure the risk is worth the reward. There needs to be a lot of profit potential to make a major rehab worth it. For me, I would want to be able to make at least $50,000 for a major remodel to be worth the hassle. That is on a house that is worth under $250,00 after it is repaired.

What has gone wrong with my major remodels?

I mentioned three major remodels I have taken on in the last two years.

  • I spent about $70,000 on the remodel on a country property. I bought it for $75,000 and sold it for close to $250,000, but it took me over a year! I made the following repairs:
    • New electric
    • New plumbing
    • New HVAC
    • New well
    • New doors, windows, fixtures,
    • New stucco
    • New paint inside
    • New kitchen and bath
    • Took out a wall
    • New flooring
  • I spent $60,000 on a remodel on a house I sold last month. I bought it for $75,000 and sold it for $220,000. It was a full gut job and I held the house for 16 months!
    • New electric
    • New plumbing
    • New HVAC
    • New drywall
    • New kitchen and baths
    • Foundation work
    • New flooring
    • Took out walls
    • New landscaping
    • New fixtures
  • I still have a home I bought for $75,000 that needs a full gut. I bought the home about a year ago and have been slowly making progress. The major issue was the project manager I fired earlier in the year, basically did more damage to the home than repairs. I might actually sell this house as it is to get rid of it.
    • New drywall
    • New kitchen and baths
    • New addition adding one bedroom and bath
    • New foundation
    • New roof
    • New siding
    • New HVAC
    • New plumbing
    • New electric
    • New insulation
    • New windows
    • New doors

While I made money on the first tow properties I held them for way too long. I also was lucky our market kept increasing in value, while I held them. Why did I hold them so long?

  • I did start work for months, because I didn’t want to take my contractors off other jobs
  • I considered selling them as-is for a smaller profit, because they were such big projects
  • It was tough getting bids and finding contractors who wanted the jobs
  • The contractors took forever to repair the houses, because they were such big jobs
  • We found new major problems on every house

Should new flippers buy houses that need major remodels?

I am guessing you already know what my answer is on this one. New flippers should try to avoid major rehabs at all costs! I am not saying a new flipper cannot be successful with a major rehab, but they chances are much smaller, than with a moderate or cosmetic flip. When you are just starting out, there is so much to learn about flips and smaller rehabs will contain many surprises. If you can start out with lighter rehabs int he beginning, you have a much better chance of succeeding and then building up to larger projects.

It may make it tougher to find a flip, if you eliminate the major rehabs, but that’s life. If you take on a major flip, it may take up to a year or more until you sell it, waiting a month to find the right deal is not that much time.

For help on getting started flipping, finding deals, financing flips and much more. Check out my book Fix and Flip Your Way to Financial Freedom, available in paperback or as an eBook. 


Flipping houses is fun and can be very lucrative. You have to be very careful what houses you buy, don’t let greed and the idea of a big payday cloud your judgement. It takes time to build up the business and get to a point where you can do multiple flips at once. Taking on too big of a project can be frustrating and make it very hard to build that business up.

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  1. Dennis Rybarczyk May 21, 2016
    • Mark Ferguson May 23, 2016
  2. Nicole Pettis April 14, 2016
    • Mark Ferguson April 15, 2016

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