Usually it’s something along the lines of what you see on HGTV. A couple like Chip & Joanna:
- Find a house on the market
- Purchase it using financing
- Do a full remodel (which is expensive)
- Sell 6-9 months later for a profit (hopefully)
Let’s call this Fix & Flip.
#1 - Fix & Flip
This the most well-known way to flip. And also the most intimidating due to the amount of money/expertise needed to accomplish it. But it has the greatest profit potential.
Most people don’t realize there are other ways to flip houses too. Some that are much simpler than what I described above. And require far less money. Or no money at all.
#2 - Lipstick Flip (also called Cosmetic Flip)
With this type of flip, you do far less to the house. Basically you’re just putting a little “lipstick” on it. You’ll:
- Clean it up
- Touch up some paint
- Fix a few other cosmetic issues
- Then list it for sale
This approach results in less overall cost (since you’re not doing a major remodel) and a faster overall timeframe (since you’re only fixing a few things).
Usually you can get this home back on the market in a month or so, rather than 6-9 months like the Fix & Flip.
#3 - Quick Flip
This is a type of flip most people have never even heard of. With this type of flip, you don’t fix up the house at all. You buy it completely as-is and then sell it completely as-is for a bit more. You don’t make as much with a Quick Flip but it is far easier, far quicker, and far less expensive. Which means you can do more of them.
- Buy a distressed house in need of work
- Find an investor who is looking for distressed houses & will pay you a bit more
- Then sell it to the investor soon after you buy it (usually within 24 hours)
With this approach, you don’t need much money. It happens within hours. And you can repeat it as often as you want.
I’ve personally flipped houses using all 3 ways. There’s no one right way. Which way you choose really depends on your goals, the amount of time you can spend, and the amount of money you can invest.
This is a great way to earn extra income!