How Much Money Can You Make Flipping Houses?


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75 thoughts on “How Much Money Can You Make Flipping Houses?”

  1. I have done some flips myself, but mostly bought and rented. Too many investors think they can make money flipping, and they sometimes get lucky. Or they work for $4.50 an hour doing the labor.

    Before the crash, many investors were bailed out by the rising markets. In today’s market, you have to buy right, and sell right.

  2. I have heard people say that to make money, you have to have money. And it’s obvious that you need money to buy a house, renovate it, and cover any extra expenses, so what would be the ideal first start for someone who is looking to go into the business of flipping houses and being a real estate agent to work my way up and get my money back and more?

    • It does take money to make money. But you can get started with less money than you think. The easiest way is to buy a personal residence below market value. You wont have to put that much down and you can slowly work on it while you live in it. Then in a couple years you can sell it tax free or refinance it in a year to take cash out. You can also look into partnering with someone who does have money.

  3. You lack the wherewithal to construct a simple, grammatically correct sentence, yet presume to dole out expert advise concerning the financial risks and rewards of “flipping” properties. Anyone who takes advise from an individual who has a problem with the dictionary definitions of “singular” and “plural” deserves the label of “American”.

    • Hi, I would you hope you understand that I don’t spend hours of every day editing my posts. I have 10 fix and flips, 11 rentals, a real estate team of ten, plus the blog and my family. I choose to write as much as I can and get as much Information out there to help people instead of write less and make sure every grammaticaly error is fixed. Your comment about Americans shows complete ignorance and stereotypical thinking which completly destroys your credibility.

  4. Hi Mark – Thank you for all this invaluable information on flipping and sharing your personal experiences. I’ve done a fair amount of reading on the net on this topic and your post, by far, presents the best realistic, ‘hands on’ information that I’ve found. I’m just getting into this ‘business’ and am hoping to net $25,000 – $45,000 on a current property that I renovated and now listed on MLS. Just bought the next flip too, so I am ‘all in’ for sure. About your ‘horrific’ grammar, that comment is just hilarious. I’d take some insignificant grammar errors any day in exchange for all of the invaluable information that you have freely made available on the net for others to benefit from. I’ve never heard of a grammar geek make $50,000 on fix and flipping a sentence, have you? 🙂

  5. Hi mark i read what S. Evans had to say. Well i just wanted to know when and where did this turn into a grammar lesson? Anyway i am looking to start fix and flipping houses, I will have my own money to invest so that is not an issue. what i would like to know is where and how i can find a team like you have?

  6. This is great information! I’m 17 years old and plan to go to business school, possibly to become a financial manager or analyst. Would it be possible to do the house flipping on the side instead of making it a full time thing? It really interests me. Thanks again for this info its really great.

  7. Mark,
    I currently have 2 rentals and 1 house I live in and am considering doing my first flip. I also have my real estate license. I have about 70,000 in working capital available ton me which should be more than enough to flip a house. My question is you said you like to make $25,000 per deal as a minimum. So is that 25k on a 100k house or 25k on a 20k house. From my understanding if you can make around 10% per deal you are doing good.

  8. Hi mark couple of questions, how do you know, what kind of return you would get per modifications (ex. Kitchens, deck or fireplace, driveway work, garage etc)? Also, when flipping houses, such as your case study house (where you noticed you had to fix the roof, when trying to sell). Does it matter if its up to code, considering you were able to buy it? Lastly, with profits so large, would you have to have a business title, to fix and flip so the irs dosent come after you or is proof of purchases and sell enough. Thanks

    • Hi Chris, I don’t ever look at individual returns per repair. I look at what has to be done per loan requirements for buyers. Then I look at the overall feel of the house and how bad the things are I might repair. IF I make repairs I make sure they are up to code. I always pay my taxes!

      • also interested in “what to do to keep the IRS from snatching tons of my profit” because i didnt “live in or own for at least 2 years”…. business title? loop holes?

  9. Mark, do you ever see good profit margins in homes you happen to get a great deal on? And if so, do you ever make money on them without actually “fixing” them up?

  10. if i bought a house for $7500, and i put $25000 into it with in a year, and tried to sell and make a profit, how does the “you must live in a property you own for two years ect” rules come into play for capital gain taxes and stuff?

    • You have to live in the home for at least two out of the last five years to meet owner occupancy tax guidelines. If you had it for a rental for a year you might be able to pay less taxes but talk to your accountant for details.

  11. Mark, I live in texas and im wanting to become a real estate agent, but i’v been told their can be conflicts of interest when flipping homes as a realtor. Do you know of any problems with being an agent and flipping homes? Thank you and love the blog! -Leo

    • Hi Leo, I would check with local state laws. In my state I have to be very careful when buying homes that are not listed. I always have the seller sign a letter saying I bought the home below market, I am an agent and i may make a profit on the deal.

  12. Hello Mark,

    I love all the information you have provided all of us with. I have a question… I am a young 22 year old not trying to work for anyone but myself. I am currently in the Army Reserves and I am a network Analyst for the government but once again I dont want to work for anyone. I would love to start flipping homes and eventually not only flip homes but buildings and invest into other things but real estate is definitely my starting point. Right now I have 25k and my close friend (business partner) has 25k we are looking to buy something in the atlanta area. What do you recommend we aim for? We have our eyes on 2 properties but were not sure if we should aim for a 50k home or look around for other homes (cheaper). Please guide and if you would like to take me under your wing and become my advisor we could DEFINITELY talk numbers! haha 🙂

    thanks,
    FYI- WE DO NOT HAVE OUR REAL ESTATE LICENSE!

    • Hi Luis, I would look for the places with the best profit margins. That is up to you to figure out in your market. 😉 You could ask this question in the forum to see if anyone has experience in atlanta.

  13. Hi Mark, I was wondering … in your opinion what do u think is better to star with … apartments ? condos? or houses?

  14. I don’t usually leave comments, but this article was really insightful and I loved how you responded to everyone’s questions and comments! Kudos and God Bless you! 😀
    I was looking into rentals, but after research, came to the conclusion that of course, flipping endures so much more profit. Now, all I have to do is research the Philadelphia and surrounding areas for cheap houses! haha 😀

    • Hi Emily, I have rentals too. I don’t think flipping is the best solution for every investor. I actually like rentals better because they keep paying over and over.

  15. Hi Mark! Great site. I’m an 18 year old from Canada. I always see you and others write about buying properties for around $100K, but I don’t live in an area where there are properties that cheap. I’s it better to flip these really cheap homes than it is to flip a rundown property with similar characteristics, but is more expensive since the area commands a higher price (I’m talking rundown homes for around $300K). Thanks!

    • Canada is tough! Flipping is an option if they don’t cash flow. There is also the option of going to different areas that aren’t quite as expensive.

  16. Hi Mark! So do you consider flipping houses a good way to start of in real estate or would it be a waste of time?

  17. Mark, I am just getting started in real estate investing and putting together my business model. Your post here was very helpful and I look forward to reading more on your site. I have a question on your profit figures. Do you pay yourself for your time and subtract this “cost” from your net profit figures? Or is your “pay” strictly the profit you make?

    Also, how long does a typical fix and flip take you, from closing to closing? If you bought a property for $500k, would you expect to make at least $125k on it (based on $25k minimum profit per $100k invested), or would less be acceptable to you if it didn’t take any longer than your typical flip?

    Thanks!

    • I don’t take any pay out for me since I am not doing the manual work on anything.

      I would want to make $125k personally because the margins get much tighter. Repairs are more, mistakes are more, unknowns costs more and it takes much more money, which limits your other options

      • Great article Mark! When you say you don’t take pay out for yourself…does that mean selling and listing (if you list a flip yourself) expenses are not deducted from your proceeds when you mention “gross profit”

        • The profit I calculate includes any fees I pay. If I pay another agent to sell it then I include that. Since I am the listing agent I do not include that since I pay no commission.

  18. Hi Mark, I’m not as rich as most people in here to start with 100k homes. How would I start on a much smaller scale, to build myself up. 10 to 15k house, what type of return would I be looking for?

  19. Hi Mark, this article is awesome!Thank you. I have around 100k, 120k to invest in flipping. Do you have any idea if someone could help me doing that?

  20. Hi Mark,
    if I would like to invenst in rentals, which area would you suggest in order to make the best net income? I would like to invest around 150k, expecting at least 8% net return. Thank you

  21. i am looking for investors to fix and flip homes in the Washington dc area if any of you are interested and joining please contact me asap.

    thanks!!!

  22. Hello, you spoke primarily of individuals i.e. flippers who need money i.e. private money lenders (PMLs) or money partner (MP). What of if I were fortunate enough to to be a hands-off real estate cash/money investor; I’m willing to invest boatloads of cash only, $50k cash on hand straight from bank account for starters, without having to be involved with the decision as you stated considering that I have a rather rewarding caree as an health-care professional that keeps me busy enough…plus I have outstanding credit so I could easily cash-advanced an additional $20-25k or more via CC with 0% APR besides the $50-100k cash on-hand from bank account, for a total of $120-125k for a single large flip or multiple flips (as PM or PML)?

    Where/how do I find experienced flippers whom are currently in the works with lots of experience and successes that could flip and generate ROI within 90-120 days? I’m only asking 50/50 split on ROI, which is fair enough.

    I’m a very serious no-hassle investor so any real leads are appreciated. I’ll invest $30-60 large for starters and then invest as much as 100k or more for a single large flip or multiple flips. If the results are promising, I shall continue to fund future projects hassle-free as I’m very reliable, I have excellent credit (high 700’s and fast approaching 800s), and I’m in it for the long haul. FYI: I am willing to invest as MP or MPL anywhere in the US; I only need need some assurance that at least I’ll get my initial investment back or better yet, profit. Please advise; thanks ; -).

    • There are no guarantees in flipping. if you want to make 50 percent of the profit the deals are usually structured so that the money investor pays for everything. You may have to invest in lower priced areas of the country to get flips all in with repairs under $125k. I don’t know anyone who would give up 50 percent of the profit for only a small percentage of the money needed like $25k. Maybe if you wanted to earn an interest rate.

  23. What is the best way to set up the business for tax advantage? I am currently just a sole proprietor and looks like I am going to get killed on taxes this year. The big one is also that self employment tax. I’m in California. I did two flips that together made over $180K in profit. Then my real estate business as a Realor, brought me to about $250K. I always dreamed of making this kind of money, but now the taxes take a lot of that excitement out. And ideas would be greatly appreciated.

  24. My new blog is dedicated at teaching people how to flip anything based on my experience. I’ve never flipped a house though, eventually i’ll get there.

  25. I flip homes in Northern CA. Just started doing it. Do you always install new cabinets in a flip? Paint the old ones? I have been using http://www.lilyanncabinets.com and cabinets from http://www.walcraftcabinetry.com. They are affordable import cabinets. My background is custom homes and being a cabinet builder. I notice these things. Does someone looking for a nice home really see the value vs. just painting the old cabinets and putting some cheap granite in. I do not want to overspend. The line is difficult to find… Thanks.

    • I think as long as you are using cabinets that are decent quality, there is very little appeal to home owners for high end cabinets. That is unless you are dealing in million dollar homes.

      • It is a hard thing to do as a custom cabinet builder. But your right, the level I am doing is not going to bring a good roi for “quality cabinets”. I am learning. thanks.

        • It can be tough. Think of it like builders. They could not build houses cheap enough for most buyers if they used the best materials. Most of the time the cheaper stuff will last a decent amount of time and be functional.

  26. As an aspiring flipper, the aspect that makes me the most nervous is the gap in time between purchasing a first flip and being able to rely on flipping income. How long did this time take for you?

    • You definitively need to have money saved up or additional income coming in. I would count on not making any money for at least six months

  27. Great article. Thanks for sharing your insights. Every decision is critical, from choosing the right property and estimating the renovation costs to selling it for the right price. Something seemingly small, like shifting a bathroom, could end up busting your budget. Everything needs to be carefully weighed. I guess that’s what makes it fun. And, like you’ve mentioned, the greater the risk, the greater the reward can be.

  28. A few questions. Is it more lucrative to be a flipper or real estate agent? How do you handle taxes of flips? Is the tax bite any less in a LLC or in own personal name? I want to pay $13,000 of debt that I owe first so I can start stashing away down payment money for a property. So I could be delayed a bit in investing. However, I do own my $165K home free and clear. Would you suggesting selling it to use for another personal property and additional investment properties? Thanks for your input! Your site is so informative.

    • Which is more lucrative depends on the money you have and the time you have plus your location. It takes a while to build up a flipping business.
      Taxes are like ordinary income on flips. LLC doesn’t really help except for liability
      Have you thought about refinancing your personal house?

    • Have you though about commercial properties? Specifically, apartment buildings. Sell the home through a 1031 exchange, use it as a down payment and go get an apartment building in a secondary market with room for a value add play and good cash flow. After two years of raising it’s worth, go refinance, pull the down payment out and go buy another apartment building. Keep repeating the same thing until you’ve replaced your income

      • There are not many opportunities for buying apartment buildings in my area. Colorado has crazy low cap rates.

  29. You left out some very important information, like the price of the homes you were buying and the amount you invested. So, pretty much what your providing in this article is useless.

  30. Way to go man keep it up! I pirchased a home right next door off estate holder for 114k cash total include closing i jist finished it 70 days later in and out put 90,000 in it had it sold before finished for 320k! And as u said u must have cash to enjoy this venture! And i do from my commercial manufacturing distribution facilites ! God is great!

  31. When you say you make an average of around 30k a flip and try to make at least 25k on every flip, is that before or after closing costs and taxes?

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