How to Start a House Flipping Business and 101 Tips

Launch a House Flipping Business: A Practical, Step-by-Step Startup Guide

What This Business Is About

A house flipping business buys undervalued residential properties, renovates them to add value, and resells them for a profit. Your work centers on finding deals, checking the numbers, arranging funds, securing permits, managing renovations, and closing the sale.

The business is project based. Cash moves in at resale, while costs arrive earlier. You will coordinate licensed contractors, follow building rules, and meet federal safety and disclosure requirements when they apply.

This guide focuses on what to do before launch. It does not cover ongoing management after your first deals begin.

Starting Foundation: Decide If This Path Fits You

Start by checking your fit. Flips require cash, patience, and comfort with risk. You will face delays, inspections, and unknown repair issues. The work also brings coordination and paperwork.

Use foundational topics to think through your decision. Consider demand, your skills, family support, and your plan to find buyers. If you are unsure about the day-to-day, take an inside look at how the business runs before you commit.

For deeper reflection, see Points to consider before starting a business and Inside look at the business you’re considering. If you are weighing alternatives, compare buying a business vs. building from scratch and review the role of passion in staying the course.

Step 1: Research Your Local Market

Your goal is to learn what sells, how long it takes, and what a renovated home is worth. Focus on neighborhoods, price ranges, and buyer financing patterns. Pay attention to areas with fast resales and predictable scopes of work.

Look at comparable sales and the typical days on market. Check which lenders are common in your target area. Many entry-level buyers use FHA loans. That can affect your resale timing, so note it now.

Varies by jurisdiction: How to verify locally — City/County open data or assessor sales portal — search “recent home sales,” “comparable sales,” and “market statistics.”

Step 2: Define Your Model and Rules

Set rules for what you will buy and what you will pass on. Decide the maximum price you will pay as a share of the after-repair value. Choose the type of work you will take on, from light cosmetic to complete renovation.

Write a one-page plan that clarifies your mission, your target neighborhoods, and your timeline from purchase to resale. Tie each decision to a reason. Simple rules reduce rushed choices and help you compare deals.

For structure and templates, see Write a business plan, Create a mission statement, and Understand supply and demand.

Step 3: Line Up Funding

Decide how you will fund acquisitions and repairs. Options include cash, credit lines, and lenders familiar with short holds. Secure proof of funds or a lender letter. Sellers often require it with your offer.

Build a simple cash flow plan. Include purchase costs, renovation costs, insurance, interest, taxes, utilities, and a reserve for delays. Carrying costs continue until you close the resale.

If you plan to hire later, budget for payroll and workers’ compensation as required in your state. Ask lenders what documents they need so you can prepare them now.

Step 4: Choose a Legal Structure

Select a structure with a professional’s help. Many flippers use an LLC or a corporation. The right choice depends on liability protection, tax treatment, and your funding plan.

Pick a business name that you can register. If you will operate under a different name, plan for a “doing business as” filing where required. Keep a record of approvals for banking and insurance.

Varies by jurisdiction: How to verify locally — State Secretary of State — search “business name search,” “form an LLC,” or “form a corporation.”

Step 5: Form the Entity

File your formation documents with your state. You will appoint a registered agent and provide a principal office address. Keep the stamped copy for your records.

Once approved, store the document with your operating agreement or bylaws. Lenders, banks, and insurers will ask for them.

Varies by jurisdiction: How to verify locally — State Secretary of State — search “business services” → “form a business.”

Step 6: Get an EIN

Apply for an Employer Identification Number. The IRS issues the number at no cost. You will use it for banking, tax forms, and contractor payments.

Keep the EIN assignment notice with your formation document. Your bank will ask for it when you open a business account.

When contacting the IRS, ask about the fastest application method and what information you need to have ready.

Step 7: Open Banking and Set Up Books

Open a separate business checking account. Keep all business income and expenses in this account. Separation helps with lending, taxes, and audits.

Create a simple chart of accounts that matches a flip. Track acquisition, renovation, carrying, and selling costs. Record every invoice and receipt as you go.

If you plan to scale beyond your first project, consider a basic accounting system that can produce a clean job-cost report for each property.

Step 8: If You Will Have Employees, Register as an Employer

If you plan to hire employees, complete your state’s employer registrations. You may need withholding and unemployment accounts. Workers’ compensation is required for employers in most states.

Ask each office what forms to file, when to file wage reports, and how to manage payments. Keep the account letters with your business records.

Varies by jurisdiction: How to verify locally — State Department of Revenue/Taxation and State Department of Labor — search “employer registration,” “withholding tax,” “unemployment insurance,” and “workers’ compensation requirements.”

Step 9: Decide Your Role in Construction

Choose whether you will act as your own general contractor or hire licensed pros for all regulated work. Rules differ by state and city. Electrical, plumbing, and HVAC often require licensed trades.

If you self-perform regulated work, confirm any contractor or trade license you need and the steps to obtain it. If you hire, collect copies of your contractors’ licenses and insurance before work begins.

Varies by jurisdiction: How to verify locally — State contractor licensing board — search “contractor license,” “apply,” and “license lookup.”

Step 10: Plan for Environmental and Jobsite Safety

For pre-1978 housing, the federal Renovation, Repair and Painting (RRP) rule applies when you disturb painted surfaces. Firms need certification, and at least one certified renovator must direct the work and follow lead-safe practices.

If you have employees or control the jobsite, you must follow construction safety standards. That includes training, protective gear, fall protection, and hazard communication where required.

Ask about firm and renovator training options, records you must keep, and any state-run RRP program. Keep proof of compliance with your project file.

• Confirm if the home is pre-1978 and plan RRP steps if so.
• Set jobsite safety basics: PPE, ladders, and fall protection.
• Prepare a simple file for permits, inspections, and safety records.

Step 11: Permits and Inspections

Before you start work, determine which building and trade permits you need. Submit plans if required. Schedule inspections at each stage, and do not cover work until it passes.

Major alterations may need a final inspection or a certificate of occupancy before resale or use. Keep every approval in your project file. Inspectors can ask to see prior notes and permits.

Varies by jurisdiction: How to verify locally — City/County Building Department — search “residential building permit,” then review “apply,” “inspections,” and “final/CO.”

Step 12: Insurance Before You Begin

Secure insurance before you acquire or start renovations. Consider general liability and builder’s risk. If you have employees, include workers’ compensation as required by your state.

Ask your agent what documentation they need, what is excluded, and how to handle vacancy and theft risks. Confirm coverage from purchase through resale.

For background on policies and risk topics, see Business insurance. Varies by jurisdiction: How to verify locally — State insurance department — search “workers’ compensation employer requirements.”

Step 13: Brand Assets and Basic Identity

Even a project-based business needs a clear identity. Choose a simple name, a clean logo, and a short message that states what you do and where you focus. Keep everything consistent across your materials.

Set up a basic website with a property gallery and a contact form. Add business cards for in-person meetings. If you maintain a small office or storage, use a sign where permitted.

For practical help, see Build a business website, Business cards, Business signage, and Corporate identity package.

Step 14: Set Up Your Workspace and Tools

Plan a small office where you can store documents and review bids. Keep lockable storage for tools and materials if you maintain your own stock. Many flippers rely on suppliers to deliver to the site as needed.

Prepare a simple system for keys, lockboxes, and access. Keep printed copies of permits and emergency contacts posted in a safe, visible spot at the jobsite.

If your city has rules about right-of-way use, dumpsters, noise hours, or parking for work trucks, read them now. Varies by jurisdiction: How to verify locally — City Planning/Code Enforcement — search “construction permits,” “dumpster permit,” and “noise hours.”

Step 15: Build Your Supplier and Contractor Network

Line up reliable professionals before you make offers. You will need a real estate agent, title/closing partner, and an attorney who understands local practice. You will also need licensed trades for regulated work.

Ask for references and check recent jobs. Confirm how they schedule inspections and handle corrections. Save copies of licenses, insurance, and W-9s.

To round out your advisory bench, see Build a team of business advisors. Varies by jurisdiction: How to verify locally — State contractor licensing board — search “license lookup” and “disciplinary actions.”

• Identify at least two qualified contractors per trade.
• Collect license and insurance proof for each vendor.
• Create simple scopes of work with start and finish targets.

Step 16: Prepare for Resale Requirements

If you renovate a home built before 1978, provide the federal lead-based paint disclosure to buyers and follow the required process. Keep evidence of compliance with your closing file. Buyers and their agents expect these documents.

Understand how common loan programs affect timing. Many FHA-financed buyers cannot purchase a property resold within a short period after the seller’s acquisition. Additional checks can apply after that window. Plan your listing date with this in mind.

Ask your closing professional which disclosures and lead pamphlets you need at contract. Ask your listing agent how buyer financing patterns in your area may affect timing today.

• Print lead disclosure forms and the federal pamphlet for pre-1978 homes.
• Check your acquisition date and plan your list date to avoid buyer restrictions.
• Keep receipts and records in your property file.

Step 17: Price and Launch Your First Acquisition

Before you write your first offer, review your rules. Confirm after-repair value with recent comparable sales. Stress-test your numbers with a longer hold and a higher repair bill. If the deal still works, proceed.

Draft a brief acquisition checklist you will reuse on every project. Keep it focused on deal fit, funding readiness, insurance start date, permit plan, and contractor availability.

For a simple framework on pricing and margins, see Set your pricing. If you plan to add staff later, see How and when to hire for timing ideas. To avoid common pitfalls, review Startup mistakes to avoid.

Products and Services You Will Offer

Your core product is an improved residential property ready for resale. The service you deliver is renovation planning, code-compliant work, and a smooth closing. Buyers receive a home with visible upgrades and required disclosures in place.

Most flips are single-family homes and small multifamily up to four units. The scope ranges from paint and fixtures to larger repairs and layout updates where allowed by code and permit.

If you sell to entry-level buyers, expect loan programs and inspections to shape your finish choices and timeline.

Pros and Cons to Weigh Before You Start

Consider both the advantages and the risks. Profit comes in chunks, but so do costs. You choose your projects, yet you cannot control inspection schedules or hidden defects once work begins.

The business can scale with a clear process, a strong vendor network, and access to funds. At the same time, it exposes you to permit rules, safety rules, and environmental rules, and it depends on the local resale market.

• Pros: project focus, flexible scope, potential for strong margins.
• Cons: capital needs, timing risk, regulatory compliance, and unknown defects.
• Neutral factors: market cycles and buyer loan rules can help or hinder timing.

Government Contacts: Keep It Brief and On Point

Some steps require contacting a government office. Keep your calls short and focused. Ask which form you need, how to apply, and how long approval takes. Confirm any fees and how to prove compliance at inspections or closing.

When you speak with staff, write the person’s name, date, and the answers you receive. File this note with your approvals and licenses for later reference.

Varies by jurisdiction: How to verify locally — use the state Secretary of State portal for entity filings; the IRS for EIN; the state Department of Revenue and Department of Labor for employer accounts; the state contractor licensing board for licensing; and the City/County Building Department for permits and inspections (search each site for the terms listed earlier).

Pre-Launch Readiness: Your Final Checklist

Before you go live, make sure you can act quickly on a good deal. Your entity and EIN should be set, your bank account open, and your insurance ready to bind. Your contractors should be selected and available for a walk-through on short notice.

Have your standard documents at hand: proof of funds or lender letter, a basic scope template, required safety and lead forms, and a permit plan for the likely scope. Keep a tidy file for each property from the first day.

• Entity formed; EIN issued; bank account open.
• Insurance lined up; contractor roster complete with licenses and insurance on file.
• Permit path mapped; disclosure forms printed; inspection schedule understood.

101 Tips for Running Your House Flipping Business

House flipping turns undervalued homes into market-ready properties by adding real improvements and selling at a profit. Success comes from solid due diligence, disciplined execution, and clean compliance with permits, safety rules, and disclosures. Use these tips to plan, launch, and run a professional operation that new buyers and inspectors can trust.

Each idea is practical and specific. Apply what fits your state and city, note where rules vary, and build repeatable routines that make every project smoother than the last.

What to Do Before Starting

1. Validate demand in your target neighborhoods by reviewing recent comparable sales, typical days on market, and price bands; commit only to areas with predictable resale activity.
2. Decide your flip scope: cosmetic-only, systems replacement, or structural changes; your scope drives permit needs, hold time, and capital requirements.
3. Build a conservative deal rule, such as a maximum purchase price as a percentage of after-repair value; use it to pass on marginal properties.
4. Assemble a core team before your first offer: real estate agent, closing/title professional, attorney, CPA, and at least two contractors per key trade.
5. Choose a legal structure with professional advice; many owners use an LLC or corporation for separation and clarity.
6. Apply for an EIN and open a dedicated business bank account to separate funds and simplify records for lenders and taxes.
7. Obtain insurance that fits flips, commonly general liability and builder’s risk; confirm vacancy, theft, and weather coverage specifics.
8. Price out permits and likely inspections for your target scope so time and cost are baked into your timeline from day one.
9. If homes may predate 1978, plan for lead-safe practices and disclosures; this affects who you hire and how you schedule.
10. Understand buyer financing patterns in your area, especially entry-level buyers who may use government-backed loans that influence resale timing.
11. Map a simple job-cost template with categories for acquisition, rehab, carrying costs, and selling expenses; you will reuse it on every project.
12. Document a pre-offer checklist so you never skip essentials like proof of funds, insurance binder timing, and contractor availability.

What Successful House Flipping Business Owners Do

13. Walk every property with a consistent scope worksheet so two different houses are judged by the same standards.
14. Photograph and label every room and system during walkthroughs; photos improve estimates and speed change decisions.
15. Keep a running “no-go” list of defects you do not take on at your current stage, such as foundation heave or major fire damage.
16. Write scopes of work in plain language with measurable finishes; ambiguity is what inflates bids and delays inspections.
17. Bid each trade against at least two licensed contractors and compare on scope, timeline, exclusions, and warranty.
18. Schedule city inspections during scope planning, not after demo; inspectors are more helpful when the plan is clear.
19. Order long-lead materials as soon as the contract is firm to prevent supply delays from extending your carry.
20. Track weekly progress against a three-line plan: critical path tasks, inspection dates, and payment milestones.
21. Hold short, standing jobsite meetings to remove blockers; minutes are one paragraph with owner decisions and due dates.
22. Close out jobs with punch lists created room by room, then re-walk with the contractor to sign off work before final payment.
23. Keep a permanent property file with permits, inspection results, warranties, and disclosures; it protects you at resale.
24. Calculate lessons learned after every sale and update your standard scope and pricing to reflect real outcomes.

Running the Business (Operations, Staffing, SOPs)

25. Create standard operating procedures for acquisitions, permitting, safety setup, change orders, and punch lists so the team works the same way every time.
26. Use a single source of truth for budgets and changes; when scope shifts, update the budget, the schedule, and the contract in the same session.
27. Require written change orders for any scope or material upgrade; note cost, time impact, and who approved it.
28. Collect licenses and insurance certificates from every contractor before they start; track expiration dates.
29. Stage the site with lockbox, permit cards, a posted schedule, and emergency contacts; inspectors notice organized jobs.
30. Bundle inspections to avoid idle time between trades; for example, rough-in inspections scheduled back-to-back reduce calendar drift.
31. Pay by milestones, not by calendar dates; tie checks to visible deliverables like passed inspections or installed systems.
32. Keep a backup contractor per trade to avoid single points of failure when schedules slip.
33. Set a materials standard (fixtures, flooring, paint systems) that balances durability and buyer appeal; standardization cuts costs and mistakes.
34. Track carry costs weekly—interest, taxes, utilities, insurance—so you feel the cost of delays and act on them early.
35. Store receipts and serial numbers for major appliances and systems; they support warranty claims and buyer confidence.
36. Use a simple jobsite safety checklist at the start of each day and correct hazards immediately; safety delays are the most expensive delays.
37. Train staff on vendor onboarding, invoice coding, and lien waiver collection; clean paperwork prevents closing issues.
38. Document your final-clean standard and schedule it after the last dusty task; clean homes photograph and show better.
39. Back up all project files to a secure cloud folder with consistent naming so you can retrieve anything during negotiations or audits.

What to Know About the Industry (Rules, Seasons, Supply, Risks)

40. Building and trade permits are typically required for structural, electrical, plumbing, and HVAC work; check your city’s specific thresholds.
41. Lead-safe rules apply when disturbing painted surfaces in most pre-1978 homes; plan certified labor and proper containment.
42. Workplace safety standards apply when you have employees or control the site; plan training and basic protective equipment.
43. Buyer loan rules can affect resale timing; certain loans scrutinize rapid resales and major value increases.
44. Seasonality affects supply and showing traffic; aim to complete exterior work in dry months and list when buyer activity rises locally.
45. Material costs move with broader supply chains; lock pricing on big-ticket items when quotes are valid.
46. Insurance requirements can change if a property is vacant; confirm how vacancy and theft coverage work for you.
47. Inspection backlogs vary by city; ask the building department about current wait times when planning your schedule.
48. Local code amendments can be stricter than model codes; read your city’s handouts for residential alterations.
49. Appraisals follow comparable sales; design towards features supported by comps rather than personal taste.
50. Environmental surprises—mold, asbestos, underground tanks—require professional handling; price discovery time into your offers.
51. Neighborhood overlays and historic districts can add review steps; verify early to avoid design rework.

Marketing (Local, Digital, Offers, Community)

52. Photograph progress and final results with consistent angles; buyers and appraisers read quality through consistency.
53. Write listing remarks that explain improvements in plain language and tie them to buyer benefits like energy efficiency or durability.
54. Use floor plans and before–after highlights to help buyers visualize changes; it reduces questions and speeds decisions.
55. Promote upcoming listings to local agents early with a one-page spec sheet and target completion date.
56. Feature vendor warranties and product brands that buyers recognize; known quality reduces perceived risk.
57. Host broker previews with punch lists completed; unfinished items create doubt and lower offers.
58. Price to the strongest comp range rather than absolute top dollar; cleaner appraisals and faster closes protect profit.
59. Maintain a simple website with past projects, finishes you standardize, and contact details for agents and buyers.
60. Share renovation stories that show code-compliant work and inspection approvals; credibility beats hype.
61. Engage the neighborhood respectfully—clean sites, clear parking, and quick snow or debris removal are noticed.
62. Use yard signs only where permitted and remove them on time; small courtesies improve your reputation with neighbors and officials.
63. Create a closeout package for buyers listing improvements, permits, and warranties; hand it over at walkthrough to build trust.

Dealing with Customers (Trust, Education, Retention)

64. Be transparent about what was replaced versus repaired; plain descriptions prevent disputes later.
65. Disclose known material facts and provide required lead-based paint materials when applicable; transparency protects closings.
66. Explain maintenance needs for new systems and finishes so buyers know how to care for the home.
67. Respond quickly to buyer agent questions with labeled photos or documents; fast answers keep deals moving.
68. Offer a reasonable access schedule for buyer measurements and contractor visits; cooperation signals confidence.
69. Bring inspection and permit approvals to the final walkthrough so buyers see proof of compliance.
70. Set expectations on closing timelines and who handles which tasks; clarity reduces last-minute stress.
71. After closing, share contact info for product warranties and service providers; small gestures create positive reviews.

Customer Service (Policies, Guarantees, Feedback)

72. Create a written post-closing contact policy with response times for legitimate workmanship issues.
73. Use a standard form to log any buyer concerns and the resolution; documentation avoids repeated debates.
74. Where allowed, provide a limited workmanship assurance for clearly defined items; specify duration and process.
75. Invite private feedback after closing to catch issues early; quiet channels reduce public complaints.
76. Track recurring punch items and fix the upstream cause in your standard scope.
77. Thank neighbors for patience after each project and share your site contact number; goodwill reduces complaints to the city.

Sustainability (Waste, Sourcing, Long-Term)

78. Plan waste handling from day one with proper dumpsters and recycling where available; clean sites speed inspections.
79. Specify energy-efficient fixtures and insulation where it supports resale; buyers value lower utility costs.
80. Salvage usable materials and fixtures when safe and permitted; reuse can cut costs without reducing quality.
81. Seal, weatherstrip, and tune HVAC systems rather than oversizing new equipment; right-sizing improves comfort and reliability.
82. Choose durable, repairable finishes in high-wear zones; longevity reduces callbacks and improves buyer satisfaction.
83. Document product specs for future maintenance; clear records reduce wasteful replacements.

Staying Informed (Trends, Sources, Cadence)

84. Check your city’s building department bulletins quarterly for code and inspection updates.
85. Follow federal guidance on lead-safe renovation and workplace safety; training and recordkeeping requirements can change.
86. Monitor local sales data monthly to spot shifts in days on market and pricing bands.
87. Ask suppliers about upcoming material lead times and discontinue notices; adjust scopes before you demo.
88. Attend local real estate investor and builder meetups to compare timelines and inspection experiences.
89. Review lender and appraisal trends with your agent so listing strategies match buyer financing realities.

Adapting to Change (Seasonality, Shocks, Competition, Tech)

90. Shift exterior-heavy projects into favorable seasons; assign interior-heavy scopes for winter months.
91. Keep a contingency in both budget and schedule so you can absorb inspection delays or supply gaps without panic cuts.
92. When demand softens, prioritize quick-turn cosmetic projects that bring cash back faster.
93. Use tech for progress tracking, photo documentation, and permit storage so anyone can step in mid-project.
94. Test small material changes on one project before rolling them into your standard; avoid fleet-wide mistakes.
95. If competition intensifies, differentiate with documented quality—permits, inspections passed, and recognized product lines.

What Not to Do

96. Do not start demo before permits are issued where required; fines and rework erase profits.
97. Do not accept bids without written scopes and exclusions; vague bids become expensive changes.
98. Do not skip lead-safe procedures in older homes; improper handling risks health, penalties, and failed sales.
99. Do not rely on one contractor per trade; a single absence can stall your entire schedule.
100. Do not overpersonalize finishes beyond neighborhood comps; appraisals pay for market-supported features, not taste.
101. Do not ignore carry costs; every day you hold the property reduces your margin and increases risk.

Sources: U.S. Small Business Administration, IRS, HUD, EPA, OSHA, NAHB