📚 Step 1: Build Your Knowledge Base

Objective: Master the fundamentals of house flipping and local market dynamics.

• Learn key terms: ARV (After Repair Value), ROI (Return on Investment), comps (comparable properties), and equity.
• Study your local market: Analyze median home prices, days on market, and buyer preferences (e.g., families prefer open floor plans, investors seek low-maintenance rentals).
• Explore financing: Personal savings, conventional mortgages (4–6% interest in 2025), hard money loans (8–15%), private lenders, or partnerships.
• Resources: Take online courses (Udemy, Coursera, or BiggerPockets), read books like The Book on Flipping Houses by J Scott, or watch YouTube channels (e.g., Flipping Mastery).
• Join real estate investment groups: Local REI clubs, BiggerPockets forums, or Meetup events for networking and mentorship.
• Understand legalities: Research state-specific requirements for permits, property taxes, capital gains taxes, and buyer disclosures.
• Tip: Create a glossary of terms and a market analysis spreadsheet to track trends.

Time: 2–6 weeks (full-time) or 1–3 months (part-time)

Cost: $0–$500 (books, courses, memberships)

💰 Step 2: Secure Financing

Objective: Fund your flip with the right financing strategy.

Compare options to balance cost, speed, and risk:

• Personal Funds: Use savings. Pros: No interest or debt. Cons: High personal risk, limited funds.
• Conventional Mortgage: Bank loans with 4–6% interest (2025). Pros: Affordable rates, long terms. Cons: Strict credit (680+ score), income verification, 30–45 day approval.
• Hard Money Loans: Private loans (8–15% interest, 1–2 year terms). Pros: Fast approval (1–2 weeks), flexible. Cons: High rates, fees (2–5%).
• Private Lenders: Funds from individuals (e.g., family, investors). Pros: Custom terms, relationship-driven. Cons: Requires trust and negotiation.
• Partnerships: Pool funds with others. Pros: Shared risk, more capital. Cons: Profit splits, potential disputes.

Action: Meet a mortgage broker to pre-qualify, calculate budget (purchase, repairs, holding, selling costs), and factor in a 10–20% contingency.

Example: For a $150,000 property with $40,000 in repairs, budget $190,000 + $19,000 (10% contingency) = $209,000.

Time: 2–8 weeks

Cost: $0–$5,000 (loan fees, appraisals, legal)

🏠 Step 3: Find a Property

Objective: Identify a property with strong profit potential.

What to Look For:

• Location: High-demand areas with good schools, job proximity, low crime (check Zillow’s market heat index).
• Condition: Cosmetic fixes (paint, flooring, fixtures) for quick flips or major renovations (foundation, HVAC) for higher returns.
• Price: Below market value (e.g., foreclosures, short sales, motivated sellers).
• ARV: Estimate post-renovation value using comps (recent sales within 0.5 miles, similar size/condition).
• 70% Rule: Purchase + repair costs ≤ 70% of ARV, minus selling costs (8–10%).
• Red Flags: Major foundation issues, mold, or zoning restrictions.

Sources: Multiple Listing Service (MLS), real estate agents, auctions, wholesalers, bandit signs, or “driving for dollars” (scouting distressed homes).

Tips: Partner with an investment-focused real estate agent, use apps like DealMachine for scouting, and verify property history (e.g., liens, title issues).

Time: 2–6 weeks (full-time) or 1–3 months (part-time)

Cost: $0–$1,500 (inspections, earnest money, scouting tools)

📊 Step 4: Analyze Costs and Profitability

Objective: Build a detailed budget to ensure profitability.

Cost Breakdown:

• Purchase Price: Negotiate to fit 70% rule (e.g., $140,000 for $200,000 ARV).
• Renovation Costs:
  • Cosmetic: $10,000–$30,000 (paint $1–$3/sq ft, flooring $2–$10/sq ft, kitchen $5,000–$15,000).
  • Major: $30,000–$100,000+ (foundation $5,000–$20,000, roof $5,000–$15,000, HVAC $5,000–$10,000).
• Holding Costs: $500–$2,000/month (mortgage, utilities, taxes, insurance).
• Financing Costs: Interest (8–15% for hard money), closing costs (2–5% of purchase).
• Selling Costs: 8–10% of sale price (realtor commissions, staging, closing).
• Contingency: 10–20% of renovation budget for unexpected issues (e.g., hidden mold).

Profit Calculation Example

ARV: $200,000

Purchase: $100,000

Repairs: $30,000

Holding: $5,000

Selling: $16,000

Profit: $200,000 – ($100,000 + $30,000 + $5,000 + $16,000) = $49,000

Tools: Excel, Google Sheets, DealCheck, or BiggerPockets calculators.

Tips: Get contractor quotes early, account for seasonal material price fluctuations, and double-check comps for accurate ARV.

Time: 1–2 weeks

Cost: $0–$150 (software, subscriptions)

🤝 Step 5: Assemble Your Team

Objective: Hire reliable professionals to execute your flip.

Key Roles:

• General Contractor: Oversees project, coordinates subcontractors (10–20% of budget).
• Specialized Contractors: Plumber ($50–$150/hr), electrician ($50–$120/hr), HVAC ($60–$150/hr), painter ($1–$3/sq ft), carpenter ($40–$100/hr).
• Real Estate Agent: Finds/sells properties (5–6% commission).
• Home Inspector: Identifies issues ($300–$500).
• Appraiser: Confirms ARV ($400–$600).
• Attorney/Title Company: Manages contracts, closing ($500–$2,000).

Tips: Get 3–5 quotes per role, verify licenses/insurance via state boards, check reviews on Yelp/Angi, and use contracts with clear milestones (e.g., 30% upfront, 40% mid-project, 30% completion).

Time: 2–4 weeks

Cost: Included in renovation budget

🔑 Step 6: Purchase the Property

Objective: Close the deal and take ownership.

• Submit offer based on 70% rule and comps analysis.
• Conduct inspection to identify issues (e.g., roof leaks, electrical faults).
• Negotiate repairs or price reductions (e.g., $5,000 off for HVAC replacement).
• Finalize financing with lender and closing with attorney/title company.
• Secure builder’s risk insurance to cover renovation risks.

Tips: Review title reports for liens, budget for closing delays, and ensure insurance covers theft or damage during renovations.

Time: 2–6 weeks

Cost: 2–5% of purchase price (closing) + $500–$2,000 (insurance)

🔨 Step 7: Renovate the Property

Objective: Transform the property to maximize value and buyer appeal.

Cosmetic Renovations (High ROI):

• Paint interior/exterior (neutral colors like gray, beige).
• Update flooring (luxury vinyl plank, hardwood, or tile).
• Upgrade kitchen (quartz countertops, stainless appliances, refaced cabinets).
• Refresh bathrooms (modern fixtures, vanities, subway tile).
• Boost curb appeal (new sod, mulch, front door).

Major Renovations (Longer-Term):

• Repair structural issues (foundation cracks, roof leaks).
• Upgrade systems to code (plumbing, electrical, HVAC).
• Add square footage (e.g., finish basement for $100–$200/sq ft).
• Remediate mold or water damage professionally.

Tips: Stick to budget (track with apps like Buildertrend), obtain permits for major work, inspect weekly, and prioritize buyer-friendly upgrades (e.g., open layouts, energy-efficient fixtures).

Time: 1–3 months (cosmetic) or 3–6 months (major)

Cost: $10,000–$100,000+

📸 Step 8: Market and Sell

Objective: Attract buyers and maximize sale price.

• Stage the home professionally ($1,000–$5,000) to showcase layout.
• Hire a photographer for high-quality listing photos ($200–$500).
• List on MLS, Zillow, Redfin, and Realtor.com.
• Host open houses (weekends, 1–4 PM) and virtual tours.
• Promote on social media (Instagram, Facebook, TikTok) and local real estate groups.
• Target specific buyers (e.g., families for 3-bedroom homes, investors for rentals).

Tips: Price slightly below comps for quick sales, highlight upgrades (e.g., new HVAC), and offer virtual staging for budget flips.

Time: 1–3 months

Cost: $2,000–$10,000 (staging, photography, commissions)

🤝 Step 9: Close the Sale

Objective: Finalize the sale and calculate profits.

• Review buyer offers with your agent (prioritize cash offers for speed).
• Negotiate terms (e.g., price, closing costs, minor repairs).
• Complete paperwork with attorney/title company.
• Pay off loans, liens, or contractor balances.
• Calculate profit: ARV – (purchase + repairs + holding + selling).

Tips: Respond to offers within 24 hours, verify buyer financing, and keep detailed records for tax purposes.

Time: 2–4 weeks

Cost: 8–10% of sale price

📈 Step 10: Review and Plan

Objective: Learn from your flip and prepare for the next.

• Analyze successes (e.g., accurate budgeting) and challenges (e.g., contractor delays).
• Adjust strategies: Refine cost estimates, streamline timelines, or switch lenders.
• Reinvest profits or secure new financing for the next project.
• Build relationships with reliable contractors and agents.

Tips: Keep a project journal, attend investor meetups to share lessons, and explore scaling (e.g., multiple flips).

Time: 1–2 weeks

Cost: $0

🏗️ Construction Blueprint

Objective: Plan and execute renovations to maximize value.

Key Components:

• Exterior: Roof (asphalt shingles, metal), siding (vinyl, brick), windows (double-pane), doors, landscaping (sod, mulch).
• Structural: Framing (wood studs), walls (drywall), floors (subflooring), attic (insulation), basement (waterproofing).
• Mechanical: Plumbing (PEX pipes, tankless water heater), electrical (copper wiring, breaker box), HVAC (furnace, ducts).
• Interior: Walls (paint, crown molding), flooring (hardwood, tile), kitchen (quartz countertops, appliances), bathrooms (subway tile, modern fixtures).
• Miscellaneous: Insulation (fiberglass), ventilation (exhaust fans), hardware (cabinet pulls), mold/pest remediation.

Renovation Steps:

1. Assess property with inspector/contractor ($300–$500).
2. Create scope of work (SOW) with tasks, materials, timelines.
3. Estimate costs: $10,000–$30,000 (cosmetic), $30,000–$100,000+ (major).
4. Hire contractors: General contractor (10–20% of budget), plumber ($50–$150/hr), electrician ($50–$120/hr).
5. Obtain permits ($500–$5,000) for structural, plumbing, electrical work.
6. Execute renovations: Demolition, structural repairs, systems upgrades, cosmetic finishes.
7. Conduct final inspections and quality checks ($300–$500).

Tips: Use cost-effective materials (e.g., luxury vinyl plank over hardwood), schedule contractors sequentially (plumbing before drywall), and address safety issues first.

✅ Access Checklists

Use the following interactive checklists to track your progress:

• House Flipping Checklist
• Construction Checklist