How does a novice/a newbie become an experienced flipper in current market

After two major remolding/extension of my own houses in past several years. I begin to test the water of the flipper business.

Just start this discussion here to get more useful information from all the experienced people here.

Some initial thought for discussion:

  1. Is it a good idea to start a LLC company for the flipper business?
  2. Is it a good idea to target on remolding first, since it takes less time without additional sqft.
  3. Is that a good idea to work with a friend for the first 1 or 2 filps to lower the risk? Maybe financially more issue or less?

Thanks all for any suggestions and ideas.

I don’t think you need to set up LLC to do your first flip, especially if you are doing traditional bank loans. If you are borrowing hard money it won’t matter as much, but getting traditional mortgages with LLC’s is tricky.

Your intuition about taking on easier remodeling projects first is probably right. It’s also easier to budget and change course if you overspent. But with inventory this tight it’s hard to make the numbers work if you just remodel.

With inventory this tight it’s hard to find projects worth doing. You really need to get your numbers right. I tried flipping in 2015. It was much less profitable than expected and I didn’t enjoy the process at all. In hindsight I should have spent the money and energy buying rentals.


Been flipping since 1976…This is probably the worst time since to start flips…Too expensive to get in the game…Just flipped 6 houses in Stockton. …was ok return but hard to find quality buyers…East Palo Alto and Oakland may be the best BA towns to flip…Flippers in highend areas need millions in cash…Lots of wealthy investors to compete against…

If you really want to flip, flip your personal residence every two years tax free…A great wealth building tool especially if you can get the max $500k gain …Thats $250k per year tax free…Requires an understanding spouse…


Correct! Numbers, Numbers, very important to have accurate expense/profit figures before we buy. What if our assumption go wrong? How can we manage such purchase afterwards to make it profitable…All brain storming strategies must be thought before the purchase !

This is best one you can consider with current status. The biggest hurdle comes from IRS+CA tax who shares big percentage of your profit !

This is very complex !

Lower risk or issues? This may increase risk (and issues) as most of them going to sit on your head and do nothing ! Some of them are good, you are lucky if you find a good one ! If you get good partners, it is mandatory for you to go LLC or Corp to separate personal liability with business liability. Then, getting finance is tough as you need record/credit to build.

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I sold a spec house in 1995 for $950k for 0 profit…It is in Menlo Park…Sold for $4m last August. .Now worth $4.2m…About $150k appreciation per year for the last 22 years…Wish I kept that one…lol

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Those two opposing perspectives have me in a dilemma on my “ex-primary” residence in Cupertino. Keep renting it or sell before the 3yr period for tax-free gains. Is there any calculator out there to help with the decision making by putting some solid numbers and projections in the mix?

I hope you are still holding Cupertino home. During 2011, when I decide to move out of WSJ primary, I had the same dilemma .

I consulted my realtor she simply told me turn it into rental ! Can you believe a realtor say this? She told me, “If you tell me sell this, You get the money in 21 days and I walk out with my commission, easy one. You are earning well and you do not need any money until you retire. I know this location for the past 40 years, just turn this as rental”.

She is right on !

I would have got 250k tax exempt money by 2011. Now, if I sell, I am sure to get 750k after 30% (LTCG) tax money. For Cupertino, no need to have calculator, blindly keep it as rental and pay off the mortgage before you retire.


Honestly, the older I get, the less i can suggest business dealings with friends. Unless you don’t mind losing them.


+one, Correct !

Or lose money in the business :grin:

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In my first flip I had partners…Two of us did all the work, two didn’t. .We kind of worked it out, we got paid for hours worked, but but there was plenty of resentment. …Partnerships need a good legal agreement and a worst case senario plan…I always did better on my own deals…Have lost plenty of money in deals with partners, never on my own…


Yeah, but then you still resent the friend… Business needs to be business. If you’re not easily willing to take your friend to court, then you shouldn’t partner with them. And if you are easily willing to take your friend to court, you’re not much of a friend! I’d stick with working with people you have no emotional attachment to.

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Try avoid partnership and start with small project you can handle on your own. With multiple decision makers, it could cause delay and could be too slow to change plans.

Democracy is really bad for business. Partners will all want a say.


A few huge success story are started by a pair of friends.
Steve Jobs and Steve Wozniak.
Larry Page and Sergei Brin.
Bill Gates and Paul Allen.
David Packard and William Hewlett.

Some founded by more friends:
Mark Zuckerberg, Dustin Moskovitz, Andrew McCollum, Eduardo Saverin and Chris Hughes.

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If you want to be a billionaire, you have to work with partners even though your partnership will have highs and lows, even though the fighting between partners could force you out or turn your friend into enemy.

For small investment, partnership could bring unnecessary complexity and drain your time and ruin the project.

Eventually one of the partners will become the decision maker and other partners will become subordinates or leave.

Jobs got rid of his friend. Zuckerburg is the CEO, where are other cofounders?


Huh? Your alt-right history?

Each founder became very rich and founded their own startups.

I am not pessimistic here, but practically this will happen, they became co-founders after 99 failures of friendship which may not be public information !

What is your point? Most startups fail even before launching the business because of disagreement of the partners involved. The second most common failure is when their sales start to pick up, fail because of inability to manage cash flow. So what? Just fact of life. Can’t see how the above facts lead to starting a business alone is better.

Flipping house with a partner might be more problematic than the value added.

Working with partners could make you a billionaire. Working alone can still make you a millionaire faster than with a partner.

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During initial phases, for few projects, OP has to work alone until he master the subject. In such case, he will succeed for sure.

Partnership comes later in life, esp when he wants to grow big.

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