How To Get Started Flipping Houses For Beginners

Dave Robertson
June 21, 2022
5 min read

Are you planning to start in the fix-and-flip business? Fixing and flipping houses can be a lucrative venture if you do it correctly. However, it’s an industry with many barriers. We’ve been there before and know it can be overwhelming, but here we present how to get started flipping houses for beginners.

Research Your Market

One of the first steps is to invest time investigating the neighborhood where you’re looking to buy a deal. Consider getting advice from a real estate agent and listing the property with them when you’re done. You want to find a house in a neighborhood with moderate to high employment numbers, lower crime rates, and general signals that it is a nice place to live. Beware of neighborhoods that have a high rate of houses for sale, this could mean that people are getting out and their houses aren’t selling. 

Learn More About Researching Your Market

Learn About The 70% Rule

 Once you have the ideal property, it is good to have a contractor evaluate all the costs of renovating the house — or use the FlipperForce Rehab Estimator. Once you have the rehab costs you can use the 70% rule to estimate the purchase price of a property.

The 70% rule states the investor should not pay more than 70% of the after-repair value (ARV). For example, if the ARV is $100,000 and the rehab costs are $10,000, then the investor should not pay more than $60,000 for the property. 

Here’s the math: $100,000*0.70 = $70,000 – $10,000 = $60,000 

Learn More About the 70% Rule 

Expand Your Network To Get Funded

 Now that you know how much the whole rehab will cost, the following step is to finance your project. If this is your first flipping project, it might be difficult to access a loan with a hard money lender since they prefer to lend to more experienced flippers. We recommend you expand your network. Start with the people who are already in your network and grow from there. Next, prepare an attractive and professional sample investment package that could sell trusted work. Be prepared to invest your own money too — it will give investors more confidence to put money into your project. 

An extra piece of advice, be very communicative and honest with your investors about all the progress and mistakes that happen in the rehab process.

Build Your Team And Sweat Equity

 If you have some talents in construction or carpentry, you can save some money building sweat equity. This refers to the unpaid labor you will put into the project, either in terms of physical labor or mental effort. For the rest of the construction labor, you are not able to do, it’s better that you hire a team to take care of it. You should include realtors, contractors, lawyers, and people who can guide you — and will give you more professional guidance your first project.

 

Be Patient 

 It’s possible you won’t make a big profit in your first project; however, you will gain a lot of experience that will make a big difference in your next project. You should make sure your investors make money; as a result, you will have their investments in the following project. Also, once you are proficient in the field, you can start diversifying your capital stack, such as getting a hard money loan from Fund That Flip.

 

Bonus FlipperForce

 

FlipperForce is a software specially created for beginners with all the tools you need to start in the real estate investing business. You can analyze deals, estimate rehab costs, manage schedules and so much more that will help guide you to get your first contract, and see your first flip! 

Sign up for a Flipper Force Rookie Plan to Start Analyzing Deals and Estimating Rehab Costs for Free!

Dave Robertson
June 21, 2022
5 min read
Our blog

Other Recent Blog Posts

New Features

Analysis Dashboards Get a Powerful Upgrade

Analysis Dashboards got a revamp! Now you can see all your Flip Analyzer and BRRRR Analyzer data in one place. You can also export your data for further analysis in Excel or Google Sheets
Dave Robertson
April 23, 2024
5 min read
New Features

Mobile Navigation Improvements!

The FlipperForce web app received a mobile-friendly makeover. We've streamlined navigation and introduced a powerful search function, making it easier than ever to manage your projects while you're on-the-go!
Dave Robertson
April 8, 2024
5 min read
New Features

Streamlined Navigation: New Top Navigation and Project Search!

We've made significant improvements to how you navigate around our platform. Now, enjoy a more simple and streamlined experience with features like dedicated Project Search and a reorganized Dashboards menu, all accessible on any device.
Dave Robertson
April 5, 2024
5 min read
New Features

FlipperForce is Back!

Remember FlipperForce, the software you loved for its intuitive interface and powerful house flipping features? It's time to bring it back!
Dave Robertson
February 20, 2024
5 min read
New Features

New Comprehensive Knowledge Base and Embedded Help Links

We just launched a new comprehensive knowledge base with videos, FAQs, case studies and more!
Dave Robertson
February 14, 2024
5 min read
New Features

Introducing "Project Search" for Easier Navigation

Now you can you can easily "type to search" for your projects so you can navigate the platform faster than ever.
Dave Robertson
January 2, 2024
5 min read

Ready to Take Action?

Sign up for a free trial and join over 1,000 house flippers and real estate investors that have taken their business to the next level!