How to Make $30,000 a Month Flipping Houses

I have flipped more than 200 houses in my career and while I love flipping, it is not easy! We have flipped 26 houses per year multiple times, and I can truly say that the more houses you flip, the more problems you have. Now, when I say house flipping, I am talking about buying houses, remodeling them, and selling them. Some people say they “flip houses” when they are wholesaling, which is buying and selling houses very quickly without remodeling them. Over the years, I have made $30,000 a month flipping houses and even more. It takes money, a team, and thick skin to make that kind of money, but it is not impossible by any means.

How much can you make on a single house flip?

I have written articles like this before and I love to break down the numbers to see how to actually do this, not just live in a fantasy world where good thoughts allow money to fall into your lap. I am also a fan of good thoughts, but that is not all it takes! The last article I wrote in this format was how to make $10,000 a month with rental properties. I love rentals and to be honest, I prefer rentals over flips, but flips allow me to buy more rentals.

I buy flips from $100,000 to $300,000 and they tend to make me from $20,000 to $50,000 per flip. I have made $100,000 or more on a flip before and I have also lost money on flips before. For the most part, I want to make at least $30,000 on every flip I do. That also makes this article really easy to write. If you want to make $30,000 a month flipping houses, flip one house a month. There the article is done!

While that math is simple, the task of flipping one house a month is not simple. Flipping one house can be tough let alone 12 ina year. We have done more and will continue to do more but it was not easy to get to this point. You can see a video of one of my best and most interesting flips below:

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Why is flipping houses hard?

A lot of people watch the house flipping television shows and think flipping is like what they see on TV. You buy a house, change the floorplan, decide what are the best design choices, and boom you make $50,000 or $100,000. The reality of flipping is much different from the television shows. Here is a break down of how it actually works:

  • Line up financing: Most people do not have the cash to flip houses so they borrow money from hard money lenders, friends, or the bank.
  • Find the deals: There are a lot of people who want to flip houses. The deals are not just sitting there for anyone to buy who wants to make $50,000. It takes a lot of work and patience to find the deals from the MLS, wholesalers, auctions, direct marketing, etc.
  • Find contractors: I do not do any of the work on house flips myself. I use contractors and subcontractors to handle it all. If you want to make $30,000 a month flipping houses you will need to hire contractors as well. Finding decent people to work on the houses is one of the toughest parts of the business.
  • Decide on what to repair: On TV, they usually go all out making tons of repairs to properties because that is what gets attention. In reality, the goal is to make only the repairs that are needed to sell the house. The bigger the remodel, the longer it takes and usually the less money you make.
  • Manage the repair process: Things rarely go as planned so someone has to manage the repair process and make sure the work is being done on time and the right way. Some of the biggest disasters come when a flipper trusts their contractor without oversite and huge mistakes are made or no work is being done.
  • Sell the house: It is not always easy to sell flips either. I am a real estate broker and list my flips for sale on the MLS. It is in almost everyone’s best interest to use an agent to sell their houses which cost money. You also need to make sure the home is clean, the work is completely done, and possibly stage the home.

Many things can go wrong during a flip and even experienced flippers like myself sometimes lose money. You have to stay on top of things and constantly tweak the business model. Materials are always getting more expensive as is labor and other costs. We are always finding new ways to get better deals in order to keep that same amount of profit.

To get that $30,000 average profit on a house everything needs to run smoothly and you need to assume there will be extra costs along they want that you are not accounting for.

My book Fix and Flip Your Way to Financial Freedom (197 reviews) goes over the ins and outs of flipping and how to actually do what I talk about in this article. It is on Amazon as an ebook, paperback, and audiobook. 

How much money do you need to flip houses?

Another roadblock for many investors is finding enough money to flip houses, especially if they have a lot of deals at once. There are lenders who will finance flips but the investors almost always need some of their money as well. You may be able to finance 90% of the deal but it is tough to finance all of it. There are also carrying costs, and financing costs while you own the property. The more money you borrow the more that money will cost you. We tend to need $50,000 or more per flip we do. If we have 10 flips going at once, that means we have at least $500,000 of our own cash tied up in those deals when we use loans. If we used all cash we would have $3,000,000 tied up in those ten deals!

It takes a lot of flips going at once to make $30,000 a month because it takes a while to flip a house.

How long does it take to flip a house?

I would love to say it takes three months to flip a house but in reality it takes much longer. We have a lot going at once so we cannot always start working on them right away. It may be a month or two before we can start the work, then it takes time to complete the work, and it takes time to sell the house once it is done as well.

Our fast flips take from 3 to 6 months to complete but may take from 6 to 10 months and a few take over a year from the time we buy them to the time we sell them. I would say our average has been around 8 months from beginning to end.

Because it takes so long to flip houses we need to have a lot of flips going at once to flip 10, 20 or even 26 houses a year which we have done a few times.

How many flips do you need going to make $30,000 a month?

If you want to make $30,000 a month flipping houses and you make $30,000 per flip that is pretty easy math. You need to flip 1 house a month or 12 houses a year. If it takes us from 6 to 10 months to flip a house that means you would need to have from 6 to 12 house flips going at once.

It took me many years to get the point where I could do that many flips, but we usually have from 15 to 20 flips going at one time and that equates to 20 to 26 flips a year selling.

Just remember this is all theory and reality can be much different! You might have some flips that lose money or take way longer than you think that drag down all of your averages. It may take more flips to make that goal or less if you manage to increase your profit margins.

If you decide to build a business like I have where you hire people to help you must factor in those costs as well. I have a project manager, bookkeeper, and other people who help with the flips as well. I also have many other things going on like this blog, my real estate brokerage, my rentals, and more!

If you want to see all of our flips in action be sure to subscribe to the InvestFourMore YouTube channel!

Source: investfourmore.com

How I Got Started Flipping Houses

Earlier this year I sold my 200th house flip. These are not wholesale deals that I never technically buy or fix up, these are house flips that we buy, renovate and sell. It has been by no means easy to do this many flips and I have had my fair share of problems along the way. However, I love real estate, particularly house flipping and that is a big reason why I think I have been so successful and been able to flip so many houses. I did not flip 200 houses overnight, it took many years. I also had a lot of help along the way and did not do it all overnight! It also took many years to build up to a point where we were doing 20 to 30 flips a year! How did I start flipping houses?

How did I get into real estate?

I suppose some would say I was lucky to get into the real estate business. I did not plan to be in real estate or have a burning desire to flip houses. I went o the University of Colorado in Boulder where I got a degree in business with an emphasis in finance. After college, I decided to help my dad while I figured out what I wanted to do with my life. I could not find the perfect finance job that would pay me millions of dollars to run a company right out of college for some reason.

My father had been a real estate agent for many years when I started working for him. I used to sleep under his desk in the office when I was a kid and I was around real estate all of my life. I loved houses and when I was a kid and even used to draw floorplans of houses I wanted to build someday. However, when I got older I lost or at least lost track of that love for houses. I did not want anything to do with real estate, maybe because I wanted to make my own path.

When I worked for my dad I was doing manual labor for $10 an hour. I was working on landscaping, painting houses, taking care of their properties, and any other task they could find for me. I saw my friends in the corporate world working like dogs and getting almost nothing for it hoping they could move up the ladder. I saw my life which was much different and had much less stress. I decided to pursue real estate a little more.

How did I flip my first house?

My dad was a real estate agent but he also flipped houses occasionally. I decided to help him a little more and I got my real estate license. I liked being an agent but I loved flipping houses with my dad. I loved the process of finding a great deal, fixing it up, and confirming that you know what you are doing by selling for a profit.

One of the main things I did, even when I had my license and was selling houses, was helping with the house flips. I convinced my dad to make me a partner and pay me a small percentage of the profits. I was not making much money, but I was a big part of the business. I remember the first house we did together.

It was a complicated deal we had to buy from the public trustee auction. We were able to buy half of the house through the husband but the wife had disappeared. Because we had half of the deed we could wait for the foreclosure process to end and we could redeem that half to get the whole house. I did a lot of research to make sure that what we thought would happen would actually happen.

Everything worked out okay, we bought the house, we fixed it up, and we sold it. After going through the process I was hooked. My dad had some contractors he had used for years who could do almost everything and he bought almost everything from the public trustee auction.

first house flip

What advantages did I have?

I was lucky to work with my dad because he knew what he was doing and was able to teach me. I did not make a lot of money as I think I started out as a 10% partner or something and I was doing a lot of work. Right away I took over managing the repairs, the designs and finding deals as he was more focused on selling houses as an agent rather than flipping them.

The biggest advantage I had was that my dad was paying for the houses using local bank’s lines of credit. This was in the early 2000s when it was much easier to get loans and lines of credit before the housing crash. My dad also paid for the repairs on the houses so I did not have to bring any money into the deals. This was a huge advantage and we both realized how lucky we were after the housing crash when lending got much tighter!

My dad did not do any of the work on the houses himself. He is not what many would consider handy and I am not sure if he ever did any of the work at all. He always hired it out and stuck to what he was best at. This was a great lesson and what I reinforced on myself when I tried to fix up a house all on my own later on. Another advantage I had was the teaching of having others do the work that you are not good at or do not have time for. We also had good contractors to work on the houses from the time I started working with my dad.

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How did I grow the business?

While I had many advantages getting started flipping houses I was not just along for the ride. I made some huge contributions and big changes to our business. My dad flipped a few houses a year at the most. He also did not spend much time remodeling them to modern standards or look for new ways to find deals. My sister had worked for him for a short time as well as his assistant before I joined the team. In both cases, they were not able to do much with the flipping business, and not much changed.

When I came into the business, I changed the paint colors, the design choices, the amount of work done as far as designing the houses. I also found new ways to get deals like auctions and the MLS. I took on different types of projects than my dad would do, and I even found us more money to use! There were family members perfectly willing to loan us money to do more flips and all we had to do was ask.

As we grew the business I slowly got a bigger and bigger percentage of the profits, but never got close to 50%. My dad was not one to give me money just because I was family and I don’t blame him for that at all. We went from doing a couple of house flips a year to 8 a year. After I took over the business, I got up to 26 house flips in one year a couple of times!

How can you get started flipping?

While I had a unique situation and advantages many of you are wondering how can this relate to me who does not have these connections or advantages. That is a good question and I cannot change the advantages I had or the advantages you may or may not have. I can give some suggestions and ideas on how to get started.

If you have the money you can start flipping on your own but make sure you are well educated on the ins and outs of house flipping. I wrote a book on flipping houses if you want to know it all and I have videos of all of my flips on my YouTube channel as well. You can see one of our latest videos below:

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If you do not have money to start flipping houses, which most people do not, there are still ways to get started even if your dad is not around to teach you the ropes.

How to flip houses with no money

The first option when you do not have much money is the easiest option and an option many people take advantage of without even knowing it. Buy a house to live in.

I know many gurus are out there telling people that a house you live in is a liability and a bad investment. I disagree completely and a house to live in affords people with little money a ton of opportunities. The amazing thing about buying a house to live in is you can buy with very little money down. That means that you can put 5%, 3.5%, 3%, or ever $0 down when buying a house to live in as opposed to 10 or 20% when buying an investment property. If you live in the property as an owner occupant for 2 years the profit will most likely be tax-free as well!

It can be tough finding houses that need some work, but not too much, as many owner-occupant loans require the houses being bought are in livable condition. It is possible and there are even loans like the FHA 203k loan that allows a homeowner to buy a house that needs a lot of repairs!

The articles below go into more details on how to actually do this:

The article on how to flip houses with no money also talks about using partners to flip houses and that is what I did with my dad. While it helped that my dad flipped houses I know many people who also get started by partnering with other flippers or people who had money. One person provided the money and the other did all the work while they split the profits 50/50. It takes more time and effort to find a partner, but they are out there!

How could someone start to flip houses with me?

I have a lot of people who want to be my mentor and learn from me while working with me. Here is the number one rule when asking a mentor for help:

Do not offer free work but have no idea what your skills are or what you can help with.

Successful people usually do not have time to find or create jobs for random people. If someone wants to work with me or for me that is fine if they want to work for free but I would much rather pay someone who will help me solve problems and make my business better. Free labor when I have to figure out what that labor can do or train that labor is not a big advantage to me.

If you want to work with a flipper, figure out how you can help them? What skill do you have to make their life easier or make them more money? Can you work on houses? Can you do accounting? Can you build a website? Can you get them more deals? What can you do? If you cannot do anything you better learn some skills ASAP!

Being motivated and working for free is not a skill. In my experience, most free labor is not good labor either and there is nothing stopping someone from quitting as soon as they get bored or distracted. I am not actively looking for people to help me flip houses but we do take on new contractors or people who can help with other tasks.

Conclusion

Flipping houses has been a ton of fun and made me a lot of money over the years, but it was not easy to build the business. I was lucky that I was able to start working with my dad to get into the business but I thrived when I took over and was able to create my own business. Often, flipping that first house is the toughest obstacle to overcome. Once you can get that first flip under your belt it all gets much easier.

If you want to learn more, be sure to get my house flipping book on Amazon!

fix and flip your way to financial freedom

Source: investfourmore.com