The average gross profit to flip a house is $65,520 and even after taking out expenses, you’re coming out of the deal with a decent profit.

If you’ve seen shows on HGTV and other networks and are wondering how to start your own house flipping business, that’s understandable. Before you get started, you need to know what you’re getting into, so you know if it is the right business for you.

We are here to help and will talk to you about how to get started with your business. Continue reading to learn how to start a house flipping business from scratch.

Write Your Business Plan

Every business needs a business plan. Not only does your business plan act as a road map for your business but it allows you to clarify the purpose of your business and state your business goals.

If you plan on trying to obtain funding then you’re going to need a business plan. Without a business plan, no lender is going to look at your business seriously or give your business any money.

Some people choose to write a traditional business plan that is quite lengthy but more people are choosing to go with a one-page business plan and keep things simple.

The main thing is that you include the import parts of your business plan like timelines, who your target audience is, your projected budget, and property types that you plan on flipping.

Determine How to Set Up Your Business

There are different ways that you can structure your business. You have to register your business name, choose your business’s legal structure, set up your business bank accounts, and secure any permits and licenses for your area.

How you set up your business determines how you pay taxes as well as how you operate your business.

The options you have to set up your business are as follows:

  • Sole Proprietorship
  • Partnerships
  • Corporations
  • Limited Liability Companies

If you’re looking for the easiest and cheapest way to set up your business, a sole proprietorship is an option you should look into.

Look into each of the business structures and you’ll see the pros and cons of each of them. Don’t jump into a choice on one of the structures before doing your research because it will make a major difference in how your business operates moving forward.

Get Necessary Funding

When you’re doing a flip, you might need some help with funding. Most people don’t have the extra money to buy and fix up a house without a loan. Some people use a bridge loan and other people choose to secure other types of funding.

Even if you have your own money, you might want to use other people’s money so you still have some cash on hand.

Network With Professionals Who Can Help

Unless you plan on doing everything on your own, you have to network with professionals that can help you get the job done. Besides finding a lender that can help you, you need to find reliable contractors and other professionals.

It’s helpful if you can find people that are familiar with doing work for people that flip houses. The more distressed the property that you’re flipping is, the more help you’re going to need.

When you’re starting out, it is helpful to work with a contractor that knows the local requirements such as permits and licenses that you’re going to need to flip the house.

Never Skimp on Market Research

If you see a house that looks like a good deal, it is easy to make an offer prematurely. Before making an offer on anything, you need to make sure to do thorough market research.

Doing market research will allow you to maximize your money and your time on each flip. If you buy a house at the wrong time, at the wrong place and at the wrong price, you could put yourself out of business before you get started.

If you aren’t familiar with the neighborhood or not confident in choosing the right house to flip, it can be helpful to work with a real estate agent that knows the area. Real estate agents know where people are looking for houses, where people are desperate to sell and more.

Understanding where buyers are buying and what they are willing to pay will make all the difference in your strategy as a house flipping business.

Take Care of Your First Flip

Now that you’ve gotten everything together, it is time to take care of your first flip.

You might make some mistakes when you’re first starting out, but you have to start somewhere. Even if you don’t make a lot of money on your first flip, you’ll be able to learn from the mistakes that you make and get better each time that you flip a house.

How to Start Your Own House Flipping Business – Now You Know

Now you know how to start your own house flipping business and can start to turn some nice profits with your new businesses. House flipping can be fun and exciting but there is a lot of work that goes into them.

Do you want more help and information about flipping houses and other business topics? Our site is full of articles that can help you as you’re growing your business and becoming successful.

Browse our blog, find a section that looks helpful, drop a bookmark and come back again soon to read more.