Make Money Flipping Real Estate – Two Ways

flippingOf course you can make money flipping real estate in more than two ways. But when it comes to actually repairing and improving a house, there are two different approaches that are very different. You can do do as much of the work yourself as possible. That’s one approach. The other? Manage the project while others do all the actual repairs and other work.

Some investors will say that your time should be spent finding and managing properties, not painting or hammering nails. Otherwise you’ve bought yourself a job, they will tell you, rather than an investment. Although I tend to agree with that idea, nothing is that simple and definite. You can make money flipping real estate either way, and there are reasons for both approaches.

Doing It Yourself

A question: Do you make more money or less money when you do your own work? It depends on how you look at the matter. You might make more money on a given project. If, for example, it costs $3,000 in labor for roofing, and you do it yourself, you can make $3,000 more profit – if you work as fast as the professionals would have (there are holding costs to pay if you’re slow). But if you do a lot of the work yourself, you might flip just a couple houses a year, rather than the dozen you could do if you paid others to do the work.

What you do get working on your own, is a bigger margin of safety. At least you CAN get a bigger margin of safety, but those of us that aren’t as skilled in the building trades might screw things up and have to hire a professional afterwards. On a house with a projected $20,000 profit after paying for labor, you might save $8,000 by doing much of the work on your own. More profit perhaps, but it also means that if there are unexpected expenses or you guess wrong on what the house will sell for, you’re less likely to have a loss.

You might also consider your cash situation. If you don’t want to bring in other investors, can’t borrow enough money, and don’t have much capital, you can get by with less by doing a lot of the work. You could even live in the home while you fix it up. It’s easier to get financing, and if you stay there two years before selling, you don’t have to pay taxes on the capital gain.

Flipping Real Estate As A Business

As a business, there is no doubt that you have the opportunity to make more money paying for help. An investor I know flipped fourteen houses one year, something he never could have done if he had been painting the homes or laying linoleum. He never got dirty, and he made it clear that he thought his time was better spent finding the next deal, while his crew finished the houses that he was flipping.
Your Choice

What’s the best approach? Well, there is more money to be made finding deals than hammering nails, but what if you need a safe small deal to get going? What if you’re short on cash and can’t borrow much? Finally, what if you enjoy the process of fixing up houses?

They are all good reasons to do the work yourself, or at least some parts. The bottom line is that there is no absolute right way to make money flipping real estate.Changing ways is natural too. After all, investors can investors learn a lot by getting involved with the renovation work. That kind of experience might mean that you save money and make better decisions later, when you are just finding deals and letting others do the work. In any case, the choice is yours.

36 thoughts on “Make Money Flipping Real Estate – Two Ways”

  1. I think whether you work on your house or pay others to do it really depends on what you are trying to accomplish. If you are doing one house at a time, and you have carpentry skills, then by all means, do it yourself, you will make more money. But if you’re doing it as a business, and you have multiple properties going at one time, then of course, you will have to hire help.

    1. Yeah, if you can do it on your own, then, it is good for you. Less people you need to hire, less money you need to put out from your pocket. But if flipping is a serious business, then hiring quality contractors is very necessary. Do not skimp out with the people you hire.

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  2. I might also add it is a necessity to have a firm understanding of the property value and home sales in the area you are looking to flip in. Especially over the next few months.

    1. to handle an FSBO property might be difficult for an owner without enough knowledge in home selling and real estate business. but yeah, with the appropriate help from other people and website like that, it will sure be a lot easier for them to sell their home.

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  3. My theory is that if it’s a job that I like to do, I do it, otherwise I hire someone. Never forget that the most important part of an flip is the purchase. It’ got to be the right house in the right neighborhood at a great price.

  4. Great article.. lots of international investing going on as well due to weakness in the dollar.. Great article.. good time to make money in real estate.. a niche to consider eh..

  5. Many of my clients have been told buying a foreclosure or distressed property is a great idea. Many have seen TV shows where people do it and make money.

    On TV I can watch a guy toss a ball 100 MPH. That does not mean if I decide I want to do that I can do it, or do it well.

    Those home buyers who do not know what they are getting into face the same fate as the person who is selling the home.

  6. I think long term you need to build a team, but if you need to make money to build your business then do a lot of the work yourself on the first couple of flips and you can save a few thousand in labor fees

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  8. The only reason that you should do the work yourself is if you didn’t buy the property with enough equity. If there is enough profit in the deal then you cant afford to be spending your time swinging a hammer. You should let an expert do the work while you are getting your next deal. Try buying on a shotsale. I am working on 60 of them right now in my office.

  9. When I first started flipping houses I did all the work myself and made much bigger profits. Of course the market was different then. I have since started using contractors for the renovations and it has become a lot easier but the profit margins are significantly smaller. I have also learned how to short sale real estate which has been going very well.

  10. If you are going to flip as your main business you most likely will want to flip a number of properties in a years time which means waiting around for a big hit is out of the question. You will need to flip some properties with a smaller margin then you would like to keep cash coming in and to do that you will need a dependable team. Personally I flip MA Real Estate only when I see a property with a huge upside and I do most of the work myself minus plumbing and electrical. But, you never know when that property will become available.

  11. My theory is that if it’s a job that I like to do, I do it, otherwise I hire someone. Never forget that the most important part of an flip is the purchase.

  12. This blog Is very informative , I am really pleased to post my comment on this blog . It helped me with ocean of knowledge so I really belive you will do much better in the future . Good job web master .

  13. I am more fond on the second approach.. When i make money flipping real estate, i can’t do all the work that has to be done that is why i need someone else’s help for the work..


  14. What person has not heard of someone burning the candles at both ends only to look up and bemoan that after putting in their time they will promptly retire and buy a condo in the southern climates to rest alongside an azure sea for the rest of their days?

  15. Flipping real-estate is dangerous in a falling market like we have today.

    Two things I recommend.

    1. Have some construction experience
    2. Have a Good estimator or appraiser

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  16. that’s a pretty good idea… I also want a foreclosure in fact i have here my source of cheap foreclosure just CLICK HERE for info.
    It’s free to join and they actually own their homes and not just a broker.

    1. Yeah, aside from flipping properties, investing in foreclosures appears to also be a rewarding endeavor.You just need to make sure that the property does not have any major defect that can be a disappointing deal-breaker.

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  17. While one is trying to flip the real estates, I would say one must visit the professional so that one can get a better valuation of the properties. Thanks for the post. It is really worth to consider the importance of professional while dealing with real estates.

  18. Somewhere in between total luck and absolute sell-out hours chasing deals is where you should be in finding truly motivated sellers, or rather having them finding you. It’s a weird coincidence that the smarter I work, the luckier I get finding great deals.

  19. I’m asking what types of properties and real estate opportunities are you seeking? The more narrow your focus and marketing efforts can become to a target group, the greater success you will experience. If you are seeking wholesale opportunities, then you will not gain very much success putting out “I Buy House/Lease Option” bandit signs next to established neighborhoods.

  20. For someone with the flipping skills, resources and knowledge, this can really be a good investment and business deal. Flipping properties might not be suitable for everyone as you have to know more about home style, design and renovation to be able to be more successful in this kind of endevor.

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  21. According to housing experts, the primary worry among buyers is that they will not get a clear title if they purchased a foreclosed home because there is a big chance that documents used in processing them were not properly filed or were not legal. However, most analysts believe that the controversy actually made foreclosed dwellings better investments than they were before because the issue made the deals safer.

  22. Home improvement includes rebuilding your attic, basement, bathroom, decks and patios, doors, drywall, kitchen and roofing. It is a total makeover for your home. Remolding kitchen is an important part of house renovation .Kitchen is the centerpiece of the home. Remodeling a kitchen can be great fun. It offers the opportunity to create a more energy-efficient kitchen and to create a space where the family can relax.

  23. I’ve said this on other sites and I’ll say it here. Find a great Realtor that will work for less. I found mine on Sundaybell and I and he haven’t been happier. He made 15k in commissions last year, and I saved 15k as well….and he negotiated another 50+ off my buying prices of which I appreciate…well worth their cost…if you call it that, he really just made me money. To some others, get your head out of the sand and check your ego at the door. These guys are the pro’s, find a really good one and they’ll pay themselves off with their negotiation strategies…and you wouldn’t stand a chance if you came across my agent.

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