Fix and Flips

How Much Money Do You Need to Start Flipping Houses?

Last Updated on August 22, 2019 by Mark Ferguson

If you want to start flipping houses, it can provide a great income, but it almost always takes money to make money. You may hear stories of investors flipping houses without any of their own money, but these investors are usually very experienced at flipping or they are giving up much of their profits. Hard money lenders can allow investors to complete a flip with less money, but hard money lenders are very expensive. Using a partner or private money can also reduce the amount of money an investor needs to flip, but you may have to give up a percentage of the profits or be very well established to use these techniques.

How much money does an investor need to flip using hard money?

There are many hard money lenders and they each have different terms and conditions on their loans. Some hard money lenders claim they will allow an investor to buy, renovate and sell a flip without any of their own money. However, most hard money lenders will only give these terms to an experienced fix and flipper with a proven record of success. The hard money-lender will require some money from the investor if they are just getting started or a share of the profits. The hard money-lender will also want to make sure the flip will be profitable and keep a very close eye on the project for any new investor.

If you are using a hard money-lender, I would count on needing at least 20 percent of the purchase price of a flip for repairs and down payment. Some hard money lenders may require more or less depending on the deal and the investor’s experience. You may be able to get the hard money-lender to fund most of the deal if you share 50 percent of the profits. Remember a hard money-lender is very expensive; rates can vary from 8% to 16% and 1 to 5 points.

Here is a video I did that shows the exact costs that various loan options cost me.

How much money will you need to start flipping houses with a partner?

I know many flippers who use partners to help with the funding of deals. I used to work with my father on our flips; he would fund the deals and I would do most of the work. I see many investors who will find deals, repair the homes and sell them but need a partner to help pay for the fix and flip. A 50/50 split is very common in these deals when one partner puts up the money and another does all the work. This may seem like an unfair split considering one person is doing all the work, but without the money, the deal could not be done.

This is one way to get started flipping, but giving up 50 percent of the profit is a big deal. I explain why saving and using more of your own money to flip will make you more money here. I think the goal of a flipper is to save enough of their own money to start paying for down payments and repairs on houses. When you give up 50 percent of the profit, it is hard to save enough money to start funding your own deals.

With a partner, it is possible that you could complete a flip without any of your own money, but you will make much less. Instead of making a $30,000 profit on a house, you would only make a $15,000 profit.

How much money will you need to flip with a bank?

It is not easy, but it is possible to flip using bank financing. I use a portfolio lender to fund my flips and they are awesome. They give me 75 percent of the purchase price and charge me 1.5 points on my short-term fix and flip financing. Instead of the 15 percent, a hard money lender would charge, my lender charges 5.25 percent interest.

My lender does not fund any of the repairs, but some portfolio lenders will. Every portfolio lender has different terms and guidelines on how much money they will lend and at what rates. I have to put down 25 percent of the purchase price and pay for repairs on each flip. That can add up to $45,000 to $60,000 on a $100,000 purchase, depending on how many repairs are needed. That seems like a lot of money, but by using my money I save thousands on the interest rate and points a hard money lender would charge. I also get to keep all the profits since I have no partner. I don’t use all my money to pay for these expenses, because I use private money as well.

How much money do you need to flip a house with private money?

Private money is an investor’s best friend if you can find the right person with the right terms. Most private money comes from someone you know; a family member, a friend or a business acquaintance. Many people are looking for a way to invest their money and get great returns without much risk. Investing money into a flip business can achieve high returns without much risk, depending on the situation. A brand new flipper is going to be riskier than an investor who has completed 50 fix and flips. Real estate can also be used as collateral for private money to give the lender more assurance the money will be paid back.

Because there are different levels of risk involved with every deal and each lender expects a different level of return, terms vary greatly with private money. I am able to pay 8 percent interest on my private money because I am a very seasoned investor and I offer great collateral to my lender. Other private lenders may expect 10 percent or even 15 percent interest on their money based on the risk. The hardest part of getting private money is finding someone to lend you money. You can’t be afraid to ask around to see if anyone you know would be interested in lending you money and getting higher returns on their money in the process.

With private money, it is possible to get started flipping with no money out of your own pocket. It may be hard to find a lender that will fund your entire deal, but it is the best route for fix and flipping with as little of your own money as possible and still keep the profits you make.


In order to fix and flip a home, you are almost always going to have to use some of your own money or split a large chunk of the profits with a partner. In order to make the most money flipping, I think a combination of bank financing, private money, and your own money is the best route to take. It is hard work saving and building up enough money, but well worth it in the end. Buying a house, fixing it up, and selling it takes a lot of time and risk. I want to be rewarded with the most money I can for taking on that risk.

21 thoughts on “How Much Money Do You Need to Start Flipping Houses?

  1. House flippers need to be well capitalized and I think most people in this business forgot about this one key aspect. They take all of their savings and use it for the down payment and have nothing in reserves.

    Most of the time your flips will run over and you’ll need the reserves to cut the check. The capital gives you flexibility in the deal and allows you to make more rational decisions.

    Banks, hard money lenders, and crowd funding companies will always lend to the person with the higher reserves.

  2. Great article, thanks!
    I want to get into flipping houses but don’t have any of the basic labour training. What would you advise as far as the best way to start learning?

    1. Do you have any contractor friends or handy friends? I would start with the people you know and see if you can help them and learn at the same time.

  3. I’d like to start flipping houses. I have some savings to sink into rehab costs and can do some of the work myself (demo’ing, painting, tiling, designing) but will need a contractor, plumber and electrician and possibly a structural engineer for actual construction work and whatever else needs to be done. A friend of mine is willing to finance the purchase/loan and pay for mortgage and closing costs while I finance all rehab costs. What percentage of the net profits would be appropriate to pay my friend for getting the loan on the property? He would not be doing any of the rehab work or time put into finding/selling the property. Also, what % should I estimate in outsourcing the rehab work (that I can’t do myself) in order to make a profit on the resale?

    1. Hi Rebecca,
      In my experience I usually see a 50/50 split in your situation. You can negotiate whatever you can, but the deal can’t be done without the money and even though your friend isn’t doing any work, the money is vital. I would not estimate anything as a percentage, but make a list of all work that needs done on each house to determine the costs.

  4. I flipped this Yellow house, bought for 47,000 sold for 136,000. Spent about 52,000 on the remodel. Profitable project.

  5. Thanks for the knowledge! As a soon to be college grad, I have many worries but also a passionate desire to get into the fixing and flipping business. Any reccommendations on how to even begin this whole process? How do I get the money to even start? How do I gain the confidence of an investor if it is only my first time buying a house?

    1. Well, you could buy a house as an owner occupant and slowly fix it up with less money and more time. Then you could live there while you go through the process.

  6. I would like to do flip house business. but i don’t know how to start this business. do i need license for it? pls help me. give me some idea. thanks

  7. If doing a 50/50 with one financier and the other the labor; does the labor person draw for a weekly salary plus get the 50% of remaining profit?

  8. I have bought one house per year for the last four years as rentals. Some with my money, some with partners and have refinanced one. I have some more capital, but want to keep it invested in more liquid options, stocks and bonds, etc. I would like to do some flips, have secured bank financing with a 20% down. I would like to offer an investor to come in with me on a project, with them putting in the down payment, me the financing, u til we sell it. I can find the property and the rehab professionals. What percentage should I give my partner for their 20% down?

    1. That is tough as they are taking on a ton of risk. They would have a second loan and would have to pay off the first if something went wrong. if you can find someone I would think well over 10 percent.

  9. i found a place with 4 bed rooms 3 bath i nee to get for 85 thousand i would need about 45 thousand to fixt it nto rent or sale wich ever comes first pls help me i must get it by wendsday or some oone else will get it so pls answer mw as soon as possible i pray that you will be able to help me you can reach me at 321-614-7489 yanick.

Add Your Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.