A Guide to House Flipping
March 6, 2022

A house can be bought, renovated, and then resold for a large profit. Many shows on television showcase attractive, well-dressed individuals who make the investment process appear simple, exciting, and lucrative.

Curb appeal and “sold” signs are important in real estate, but they are not the only factors to consider on the way to financial success. Many would-be property investment tycoons fail because they ignore the fundamentals. To avoid these blunders, would-be flippers should focus on these common pitfalls. Undoing them is a difficult task.

As with any other business, flipping houses takes a lot of expertise, planning, and sleight of hand to be a success. Underestimating the project’s time or budget is a common blunder made by first-time real estate investors. Another common mistake made by house flippers is overestimating their abilities and understanding. Real estate investing relies heavily on timing, requiring a high level of patience and sound judgment.

What is the Process of House Flipping?

When a real estate investor buys a property intending to resell it for a profit, this practice is known as flipping or wholesale real estate investing.

Individual properties or a group of properties are purchased and then sold by investors who flip properties. Many investors hope to produce a consistent revenue stream by flipping properties frequently.

Flipping a building or house, then, this is how you do it. To put it another way, you’re looking to make money by buying low and selling high. In contrast to buying and holding, you finalize the transaction as soon as possible to reduce the period your money is exposed to risk. In most cases, quickness is more important than maximum profit because living expenses rise with each passing day.

The 70% Rule

To avoid paying more than 70% of a property’s after-repair worth minus the costs of repairs, an investor should adhere to the 70% rule. Once a home has been fixed, the ARV is the value when sold.

In a hot real estate market, where values rise rapidly, this profit is often obtained from price appreciation or renovations made to the property—or from both. An investor can buy a property in a desirable neighborhood undertake extensive repairs before putting it up for sale at an inflated price to reflect the property’s new appearance and features.

Where Do You Begin?

The first and most important advice is to minimize your financial risk while maximizing your return. Do your homework before purchasing and find out exactly how much repairs or modifications will cost before making a purchase. Once you have that knowledge, you can decide the best possible amount to pay.


When considering flipping a house, know what is required and the hazards. When flipping for the first time, novices tend to overestimate their abilities while underestimating the time and money they’ll need. Flipping a house for a big profit isn’t as effortless as it would seem in the media. But it is not impossible to achieve, even though that takes an enormous amount of time and effort.