Can you really make a bundle by flipping a house? It sounds alluring, but it's also risky. House flipping—that is, buying a fixer-upper with the intention of selling it quickly for a profit—can easily backfire if you’re not careful. Get the down-and-dirty from these 10 house flippers before embarking on your own real estate speculation.
Earnings: Not Enough
Given that Rob Berger has flipped only one house, you might consider his vow that he’ll “never again flip a property” a bit premature. But his DIY experience did give him some hard-earned insights into this much-hyped trend. His number one tip? “Turn off HGTV.”
CPA Logan Allec discovered his first flip by turning to “good old direct mail marketing," sending out letters and postcards to absentee landlords in his target market. Great finds are snapped up quickly online, so you need to be creative to score a deal. Be prepared to put in the time and money it takes to earn a solid ROI.
Adela Mizrachi underscores the importance of having a knowledgeable partner when flipping a house. Fortunately for her, Adela’s business partner is also her boyfriend John, a licensed real estate agent. She’s flipped two houses (so far) and advises first-timers to “double the amount of time” you budget for the whole process.
Being a businessman by nature and profession helps Brian Rudderow, a CEO in Colorado, turn a profit. He uses his own website to attract real estate leads and goes for homes in great neighborhoods “where values [are] skyrocketing.” These tactics earned him $114,900 on a single home in Colorado Springs.
One common theme in house-flipping success? Serious trade knowledge of real estate. This is the case with Uriah Dortch, a professional home buyer and broker. His biggest win was a property in Raleigh, North Carolina. The house “was in terrible condition” and required a $126,400 renovation in addition to the $72,000 purchase price. He still made a tidy profit.
Earnings: $400,000 after 5 Flips
Though he eventually netted a healthy nest egg, Carl, a house flipper in Colorado, spent “at least 2,000 hours” doing renovation work “with no financial gain.” As he learned from his experience flipping a house during the Great Recession, some factors are beyond a flipper's control. Changing economic conditions can "derail the best-laid plans."
Earnings: “A Reasonable Return…”
“...Yet given the months of work and the financial risk we took, it was not worth it.” This is how S.L. Brown sums up her house-flipping experience. Though she and her husband ultimately hit their target price, the return on investment wasn't great enough to justify the stress that the renovations put on the couple, who were also holding down full-time jobs as lawyers.
Related: The Most Popular Home Improvement Projects in America
Melissa, a self-described “DIY addict” and real estate agent in North Atlanta, embarked on her first flipping adventure as an indebted young professional. The result? Enough money “to pay off my car, 3 credit cards I had balances on, put some money toward my student loans and set cash aside for savings.”
Earnings: Around $30,000 Per Flip
House flipper Mark Ferguson admits that profits—and losses—can vary wildly with each property. He’s flipped more than 155 homes and averages a $30,000 profit on each. “You can make a lot of money once you have developed a system and learned the business,” he says.
Related: 12 Hidden Costs that Come with Selling a Home
If you have the money to hire a handyman for every household woe, go ahead. But if you want to hang on to your cash and exercise some self-sufficiency, check out these clever products that solve a million and one little problems around the house. Go now!